KARMAYOGI SHANKARRAOJI PATIL SSK LIMITED,PUNE vs. ITO, WARD 14(1), PUNE

This assessee’s appeal for A.Y.2016-17 is directed against the Commissioner of Income Tax(Appeals)-7, Pune’s order, dated 24.10.2019 passed in case no.PN/CIT(A)-7/Cir-14/10189/2018-19 involving proceedings u/s 143(3) of the Income Tax Act, 1961 in short “the Act”. Heard both the parties. Case file perused.

Coming to the assessee’s sole substantive grievance raised in the instant appeal that both the Lower Authorities have erred in law and on facts in disallowing its contribution made to Vasantdada Sugar Institute(VSI) to the tune of Rs.17,75,229/-, it emerges that the for A.Y. 2016-17 Karmayogi Shankarraoji Patil Sahakari Sakhar Karkhana Ltd., (A) ld.CIT(A) has confirmed the assessment findings to this effect as follows: “4.3 I have carefully considered the facts of the case and law apparent from the records. The appellant has collected an amount of Rs.17,75,229/- which remained unpaid to research institute (VSI) and claimed deduction under 35(1 )(ii). The appellant contended that, it should be treated as paid as defined u/s 43(2) and it is not covered under section 43B. The appellant relied on the decision of the Panchaganga SSK Ltd. The appellant is eligible for weighted deduction u/s 35(1) to on payment to approved institution VSI by virtue of the notification of the CBDT in this regard in 2007. The appellant has not been able to adduce any evidence that amount has been paid to VSI and receipt in this regard has been received from VSI. The VSI cannot account the amount of contribution from the appellant unless it is received by the VSI and in turn the VSI issues certificate of the contribution. The contribution being made by the appellant is not deduction itself. If the appellant is doing research itself then, such possibility of getting deduction without making actual payment may arise. The VSI is also require to furnish the details of contribution received during the financial year to the authority specified in the notification. If name of the contributor along with amount is not appearing in particular financial year the deduction cannot be claimed. The appellant has also not demonstrated that, the receipts following the category diversion of income by overriding title. In this circumstances the decision of the ITAT, Pune in case of Panchangana SSK Limited, on ITA No.2112-PUN-2019 for A.Y. 2016-17 Karmayogi Shankarraoji Patil Sahakari Sakhar Karkhana Ltd., (A)

We find that both parties vehement rival stands against and in support of the impugned disallowance that the assessee had merely made a provision of the impugned sum than having actually contributed / paid the same to the recipient as it is learned counsel’s plea before us. There is no material before us which could throw light on the basis of the impugned provision as on 31.03.2016. Mr.Dhavle strongly argued that this tribunals various co-ordinate benches have already allowed similar claims in case of the very recipient i.e. Vasantdada Sugar Institute. Be that as it may, we are of the view the Assessing Officer needs to re- examine the entire issue afresh in the light of assessee’s corresponding material leading to the impugned provision in relevant previous year in light of all of the latter’s evidence to be filed in consequent proceedings. Needless to say, he shall also taken into consideration all the relevant for A.Y. 2016-17 Karmayogi Shankarraoji Patil Sahakari Sakhar Karkhana Ltd., (A) judicial precedents to this effect in consequential proceedings. Ordered accordingly.