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

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

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.

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.

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.

In the result, the appeal of assessee is dismissed.