ANILKUMAR JAYANTILAL KHATRI,AHMEDABAD vs. THE DY.CIT, CIRCLE-3(1)(1), AHMEDABAD

ITA 2053/AHD/2025Status: DisposedITAT Ahmedabad16 October 2026AY 2019-208 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to establish that the impugned contribution represented a genuine donation eligible for deduction under Section 80GGC of the Act. The reasoning was based on the investigation material, statements recorded under Section 132(4), bank trail analysis, and the established modus operandi of the recipient political party, Apna Desh Party. The Tribunal noted that these factors constituted a complete chain of circumstances overwhelmingly demonstrating that the donation was merely an accommodation entry. The Tribunal relied on the consistent view taken by coordinate benches in identical matters and cited the Supreme Court's decisions in CIT v. Durga Prasad More and Sumati Dayal v. CIT, emphasizing that taxing authorities can look beyond documentary evidence and examine surrounding circumstances and human probabilities. The ratio decidendi is that mere payment through banking channels and production of donation receipts cannot override substantial evidence indicating that the recipient political party was involved in providing accommodation entries. Consequently, no infirmity was found in the CIT(A)'s order affirming the Assessing Officer's disallowance. The grounds raised by the assessee were dismissed.

What were the facts?

The assessee, Anil Jayantilal Khatri, filed an appeal against the order of the CIT(A), NFAC, Delhi, for Assessment Year 2019-20. The appeal challenges the confirmation of a disallowance of Rs. 1,50,000/- claimed as deduction under Section 80GGC for a donation to Apna Desh Party. This disallowance led to a consequential addition of Rs. 1,50,000/- under Section 69A read with Section 115BBE. The assessee had declared a total income of Rs. 3,88,620/-, including the claimed deduction. The Assessing Officer reopened the assessment based on information from search and seizure proceedings against Registered Unrecognised Political Parties (RUPPs), including Apna Desh Party. Despite the assessee providing documentary evidence, the AO disallowed the deduction, citing the Investigation Wing's findings about Apna Desh Party's alleged accommodation-entry activities. The CIT(A) upheld this decision.

What were the issues?

1. Whether the Tribunal had to decide if the disallowance of Rs. 1,50,000/- under Section 80GGC, in respect of a donation made to Apna Desh Party, was justified, and if the consequential addition of Rs. 1,50,000/- under Section 69A read with Section 115BBE was sustainable, turning on the genuineness of the donation. Assessee's contentions: None recorded as the assessee did not appear for the hearing. Revenue's contentions: The revenue, through the Senior DR, argued that the investigation material, including statements recorded under Section 132(4), bank trail analysis, and the established modus operandi of the recipient political party (Apna Desh Party), overwhelmingly demonstrated that the donation was an accommodation entry and not a genuine contribution eligible for deduction. The revenue relied on the findings of the Investigation Wing regarding the alleged accommodation-entry activities of Apna Desh Party and the failure of the assessee to establish the genuineness of the donation beyond primary documentary evidence. The revenue also cited various coordinate bench decisions and Supreme Court judgments like CIT v. Durga Prasad More and Sumati Dayal v. CIT to support the proposition that taxing authorities are not bound by documentary evidence alone and can look beyond the apparent to ascertain the real nature of a transaction.

Which sections of the Income-tax Act were involved?

Section 80GGC,Section 69A,Section 115BBE,Section 132(4),Section 13A,Section 29C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-

For Respondent: Shri Amit Pratap Singh, Sr. DR
Hearing: 14.09.2026Pronounced: 16.10.2026

This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as "CIT(A)" for short), dated 21.08.2025 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Year (AY) 2019-20. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) in confirming the disallowance of deduction of Rs.1,50,000/- claimed u/s 80GGC of the Act in respect of donation made to Apna Desh Party and in sustaining the consequential addition of Rs.1,50,000/- u/s 69A r.w.s. 11

The order continues below.

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