SHRI SANTNATH SAHAKARI SAKHAR KARKHANA LTD,SOLAPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX,

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ITA 2990/PUN/2016Status: DisposedITAT Pune18 October 2018AY 2009-104 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The tribunal held that deduction under Section 35(1)(ii) is admissible only if the amount is actually paid to the research institute. Since the assessee failed to demonstrate actual payment, the disallowance was upheld.

What were the facts?

The assessee, a co-operative sugar factory, claimed a deduction for contributions made to a research institute (VSI). The Assessing Officer disallowed the deduction, stating the amount was collected but not actually paid to VSI. The CIT(A) upheld this decision.

What were the issues?

Whether the assessee is eligible for deduction under Section 35(1) when the contribution to the research institute was not actually paid.

Which sections of the Income-tax Act were involved?

Section 35(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, PUNE

Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM

For Respondent: Shri Rajesh Gawli

आदेश / ORDER

PER VIKAS AWASTHY, JM :

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-7, Pune dated 16-09-2016 for the assessment year 2009-10.

2.

The first notice of hearing of appeal was sent to the assessee on 24-02-2018 for 22-03-2018. On the said date none appeared on behalf of

2 ITA No. 2990/PUN/2016, A.Y. 2009-10

the assessee. In the interest of justice fresh notice was issued for 16-05-2018. On 16-05-2018 a written request was received from the assessee for adjourning the hearing of the appeal. The appeal was adjourned to 17-05-2018. On 17-05-2018 none appeared on behalf of the assessee and the appeal was thereafter adjourned to 21-08-2018. A fresh notice intimating hearing of the appeal was issued on 18-05-2018 through RPAD. As per the acknowledgment available on record, the notice was duly served on the assessee. Despite service of notice and repeated opportunity of hearing none appeared on behalf of the assessee on 21-08- 2018. It appears that the assessee is not keen to pursue its appeal hence, the appeal is taken up for adjudication on the basis of documents available on record and with the assistance of ld. DR.

3.

The brief facts of the case as emanating from records are : The assessee is a Co-operative Society engaged in manufacturing of white sugar. The assessee filed its return of income for the impugned assessment year on 29-09-2009 declaring total income as Nil. During the course of scrutiny assessment proceedings the Assessing Officer made addition of Rs.84,413/- by disallowing assessee’s claim of deduction u/s. 35(1) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) on account of contribution made to research institute - VSI. The Assessing Officer held that deduction u/s. 35(1) is admissible on actual expenditure. Whereas, the assessee has collected the amount Rs.84,413/- but has not contributed the amount to VSI.

Aggrieved by the assessment order dated 27-12-2011, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) upheld the decision of Assessing Officer and dismissed the appeal of assessee.

3 ITA No. 2990/PUN/2016, A.Y. 2009-10

4.

Shri Rajesh Gawli representing the Department submitted that the amount of Rs.84,413/- on which deduction u/s. 35(1) is claimed is unpaid to the research institute – VSI. Hence, the assessee is not eligible for claiming deduction u/s. 35(1) of the Act. The ld. DR further submitted that in the assessment year 2006-07 the assessee had claimed similar deduction, however, the same was rejected for the similar reasons.

5.

We have heard the submissions made by ld. DR and have perused the orders of authorities below. The solitary ground raised by the assessee in appeal is against disallowance of deduction Rs.84,413/- u/s. 35(1) on account of contribution to VSI. The authorities below have disallowed the amount as the amount was not actually paid to the research institute – VSI. The deduction u/s. 35(1)(ii) is available to an assessee if an amount is actually paid to a research association. In the instant the assessee has failed to demonstrate that the amount has actually been paid to the research institute. The authorities below have rightly denied the benefit of section 35(1)(ii) to the assessee. We do not find any infirmity in the impugned order. Accordingly, the appeal of assessee is dismissed.

6.

In the result, the appeal of assessee is dismissed.

Order pronounced on Thursday, the 18th day of October, 2018.

Sd/- Sd/- (डी. करुणाकरा राव/D. Karunakara Rao) (ववकास अवस्थी / Vikas Awasthy) ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 18th October, 2018 RK

4 ITA No. 2990/PUN/2016, A.Y. 2009-10

आदेश की प्रयिलऱवऩ अग्रेवषि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. आयकर आयुक्त (अऩीऱ) / The CIT(A)-7, Pune 3. 4. The Pr. Commissioner of Income Tax-6, Pune ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, “एक-सदस्य मामऱा” बेंच, 5. ऩुणे / DR, ITAT, “SMC” Bench, Pune. गाडड फ़ाइऱ / Guard File. 6. //सत्यावऩत प्रयत // True Copy// आदेशानुसार / BY ORDER,

यनजी सधचव / Private Secretary, आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune

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