Jain Jewellers Pvt. Ltd., Ahmedabad v. ITO, Ward-2(1)(2),, Ahmedabad

ITA 86/AHD/2018 | 2014-2015
Pronouncement Date: 26-11-2019 | Result: Allowed

Appeal Details

RSA Number 8620514 RSA 2018
Assessee PAN AAFCA1981L
Bench Ahmedabad
Appeal Number ITA 86/AHD/2018
Duration Of Justice 1 year(s) 10 month(s) 20 day(s)
Appellant Jain Jewellers Pvt. Ltd., Ahmedabad
Respondent ITO, Ward-2(1)(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 26-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 26-11-2019
Date Of Final Hearing 21-10-2019
Next Hearing Date 21-10-2019
Last Hearing Date 25-07-2019
First Hearing Date 25-07-2019
Assessment Year 2014-2015
Appeal Filed On 05-01-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHR I RAJPAL YADAV JUDICIAL MEMBER AND SHRI AMARJIT SINGH ACCOUNTANT MEMBER JAI N JEWELLERS PVT. LTD. 1265 LUHAR S PLOE CORNER MADAN G OPAL HAVELI ROAD MANEKCHOWK AHMEDABAD PAN: AAFCA1981L (APPELLANT) VS THE IT O WARD - 2 ( 1 )(2 ) AHMEDABAD (RESPONDENT) REVENUE BY : S H RI VIDHYUT TRIVEDI SR. D . R. ASSESSEE BY: SHRI M.S. C HHAJED A.R. DATE OF HEARING : 21 - 10 - 2 019 DATE OF PRONOUNCEMENT : 26 - 11 - 2 019 / ORDER P ER : AMARJIT SINGH ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2014 - 15 ARI SES FROM ORDER OF THE CIT(A) - 2 AHMEDABAD DATED 1 9 - 12 - 2 017 IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPE AL: - 1. THE ORDER PASSED BY THE LD. CIT(A) IS AGAINST THE LAW EQUITY AND JUSTICE. 2 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ORDER OF THE LD. A.O. OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 35(I)(II) OF RS.22 75 000/ - . I T A NO . 86 / A HD/20 18 A SS ESSMENT YEAR 2014 - 15 I.T.A NO. 86 /AHD/20 18 A.Y. 2014 - 15 PAGE NO . JAIN JEWELLERS PVT. LTD. VS. IT O 2 3 THE LD. C IT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION U/S 14A OF RS.37 500/ - . 3. THE FACT IN BRIEF IS THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 27 TH JULY 2014 DECLARING TOTAL INCOME OF RS. 28 79 160/ - . THE CASE WAS SUBJECT TO SCRUTINY ASS ESSMENT AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 29 TH SEP 2015. DURING THE COU R SE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO FURNISH THE DETAIL ABOUT THE CLAIM OF DEDUCTION U/S. 35(1)(II) ON ACCOUNT OF DONATION. ON VERIFICATION OF THE D ETAIL FURNISHED BY THE ASS ESSEE THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLA IMED DEDUCTION TO THE AMOUNT OF R S. 20.75 LACS U/S. 35(1 )(II) ON GIVING OF DONATION OF RS. 13 LACS TO HERBICURE HEALTH CARE BIO HERBAL RESEARCH FOUNDATION CALCUTTA. THE A SSESSING OFFICER HAS RECEIVED INFORMATION FROM THE INVESTIGATION WING THAT THE AFORESAID INSTI TUTION WAS ENGAGED IN FACILITATING THE DONATION IN LIEU OF EARNING COMMI SSION AND ASSESSE E WAS ONE T HE BENEFICIARIES THEREFORE THE ASSESSE E WAS ASKED TO EXPLAIN WHY THE CLAIM OF DEDUCTION TO THE AMO UNT OF RS. 22.75 LACS U/S. 35(1) (II) SHOULD NOT B E DISALLOWED. THE ASSESSEE SUBMITTED THAT IT HAS GIVEN THE DONATION BY ACCOUNT PAYEE CHEQUE AND ON THE BASIS OF ADMISSION OF THIRD PARTY IT CANNOT BE TREATED AS BOGUS DONATION. THE ASSESSEE HAS ALSO SUBMITTED THAT IT HAS NOT RE C EIVED ANY CASH BACK AGAINST GIVING OF DONATION TO THE ABOVE REFERRED INSTITUTION. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND DISALLOWED THE CLAIM OF DEDUCTION U/ S. 35(1 )(II) ON THE BASIS OF REPORT O F THE INVESTIGATION WING THAT HERBICURE HEALTH CARE BIO HERB AL RESEARCH FOUNDATION WAS ENGAGED IN ACCOMMODATING BOGUS DONATION IN LIEU OF COMMISSION. I.T.A NO. 86 /AHD/20 18 A.Y. 2014 - 15 PAGE NO . JAIN JEWELLERS PVT. LTD. VS. IT O 3 4. THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A) . THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US THE LD. COUNSEL HAS REITERATED THE SUBMISSION MADE BEFORE THE ASSESSING O FFICER AND CIT(A) THAT IT HAS PAID THE DONATION BY ACCOUNT PAYEE CHEQUE A ND IT HAS NOT RECEIVED THE AMOUNT BACK IN CASH. THE LD. COUNSEL HAS ALSO CONTENDED THAT NO OPPORTUNITY FOR CROSS EXAMINATION WAS GIVEN TO THE ASSESS EE . THE LD. COUNSEL HAS PLACED RELIANCE ON THE DECISION OF CO - ORDINATE BENCH IN THE FOLLOWING CASES: - (I). ACIT VS. M/S THAKKAR GOVINDBHAI GANPATLA L HUF VIDE ITA NO. 2318/AHD/2017 DATED 17 - 07 - 2019 AND (II). SG VAT CARE PVT. LTD. VS. ITO VIDE ITA NO. 1943/AHD/2017 DATED 15 - 01 - 2019. THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LD. CIT(A) 6 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CA REFULLY. IT IS OBSERVED THAT IDENTICAL ISSUE ON SIMILAR FACT HAS BEEN ADJUDICATED BY THE CO - ORDINATE BENCHES OF THE ITAT IN VARIOUS CASES REGARDING CLAIM OF DONATION U/S. 35(1)(II) FOR GI VING DONATION TO THE SAME INSTITUTION I.E. HERBICURE HEALTH CARE BIO HERBAL RESEARCH FOUNDATION HOLDING THAT T HE ASSESSEE HAS NO MECHANISM TO CHECK THE VERACITY WHEN CERTIFICATE TO OBTAIN DONATION HAS BEEN CANCELLED AFTER TWO YEARS OF THE PAYMENT OF DONAT ION. IT IS ALSO NOTICED THAT CERTIFICATE FOR RECEIVING DONATION WAS CANCELLED ON 5 TH SEP 2016 WHEREAS IN THE CASE OF THE ASSES SEE THE DONATION WAS GIVEN ON 11 TH MARCH 2014 AND 18 TH MARCH 2014 TO THE AMOUNT I.T.A NO. 86 /AHD/20 18 A.Y. 2014 - 15 PAGE NO . JAIN JEWELLERS PVT. LTD. VS. IT O 4 OF R S. 13 LACS. RELEVANT PART OF THE DECISION OF CO - ORDINATE BENCH ON SAME ISSUE AND IDENTICAL FACTS IN THE CASE OF THE CIT VS. THAKKAR GOVINDBHAI GANPATLAL HUF (ITA NO. 2318/AHD/2017 DATED 17/07/2019) IS REPRODUCED AS UNDER: - 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. IN THE CASE OF S.G.VAT CARE P.LTD. (SUPRA) THE TRIBUNAL HAS RECORDED THE FOLLOWING FINDING: 2. IN THE FIRST GROUND OF APPEAL THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.8 75 000/ - ON ACCOUNT OF A LLEGED BOGUS DONATION TO HERBICURE HEALTHCARE BIO - HERBAL RESEARCH FOUNDATION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 20.11.2014 DECLARING TOTAL INCOME AT RS.4 47 910/ - . ON SCRUTINY OF THE ACCOUNTS IT REVEALED THAT THE ASSESSEE - COMPANY HAS GIVEN DONATION TO HERBICURE HEALTHCARE BIO - HERBAL RESEARCH FOUNDATION CALCUTTA. A SURVEY ACTION WAS CARRIED OUT AT THE PREMISES OF THE DONEE WHEREIN IT REVEALED TO THE REVENUE THAT THIS CONCERN WAS MISUSING THE BENEFIT OF NOTIFI CATION ISSUED BY THE INCOME TAX DEPARTMENT. IT HAS BEEN GETTING DONATIONS FROM VARIOUS SOURCES AND AFTER DEDUCTING CERTAIN AMOUNT OF COMMISSION THESE DONATIONS WERE REFUNDED IN CASH. ON THE BASIS OF THAT SURVEY REPORT REGISTRATION GRANTED TO ITS FAVOUR WAS CANCELLED. ON THE BASIS OF THE OUTCOME OF THAT SURVEY REPORT THE LD.AO CONSTRUED THE DONATION GIVEN BY THE ASSESSEE AS BOGUS. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT DONATIONS WERE GIVEN ON 25.3.2014. AT THAT POINT OF TIME DONEE WAS NOTIFIED AS ELIGIBLE INSTITUTION AND FALL WITHIN THE STATUTORY ELIGIBILITY CRITERION. CERTIFICATE FOR RECEIVING DONATION WAS CANCELLED ON 5.9.2016. THERE IS NO MECHANISM WITH THE ASSESSEE TO VERIFY WHETHER SUCH DONEE WAS A GENUINE INSTITUTE OR NOT WHICH CAN AVAIL DONATION FROM THE SOCIETY. 5. THE LD.DR ON THE OTHER HAND CONTENDED THAT IN THE INVESTIGATION IT CAME TO KNOW ABOUT BOGUS AFFAIRS CONDUCTED BY THE DONEE. HENCE TH ESE DONATIONS ARE RIGHTLY BEEN TREATED AS BOGUS AND ADDITION IS RIGHTLY MADE. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. THE AO IS HARPING UPON AN INFORMATION SUPPLIED BY THE SURVEY TEM OF CALCUTTA. HE HAS NOT S PECIFICALLY RECORDED STATEMENT OF REPRESENTATIVES OF THE DONEE. HE HAS NOT BROUGHT ON RECORD A SPECIFIC EVIDENCE WHEREIN DONEE HAS DEPOSED THAT DONATIONS RECEIVED FROM THE ASSESSEE WAS PAID BACK IN CASH AFTER DEDUCTING COMMISSION. ON THE BASIS OF A GENER AL INFORMATION COLLECTED FROM THE DONEE THE DONATION MADE BY THE ASSESSEE CANNOT BE DOUBTED. NEITHER REPRESENTATIVES OF THE DONEE HAVE BEEN PUT TO CROSS - EXAMINATION NOR ANY SPECIFIC REPLY DEPOSING THAT SUCH DONATION WAS NOT RECEIVED OR IF RECEIVED THE SAME WAS REPAID IN CASH HAS BEEN BROUGHT ON RECORD. IN THE ABSENCE OF SUCH CIRCUMSTANCES DONATION GIVEN BY THE ASSESSEE TO THE DONEE ON WHICH THE ASSESSEE NO MECHANISM TO CHECK THE VERACITY CAN BE DOUBTED MORE PARTICULARLY WHEN CERTIFICATE TO OBTAIN DONATION HAS BEEN CANCELLED AFTER TWO YEARS OF THE PAYMENT OF DONATION. IT IS FACT WHICH HAS BEEN UNEARTHED SUBSEQUENT TO THE DONATIONS. THEREFORE THERE CANNOT BE ANY DISALLOWANCE ON THIS ISSUE. WE ALLOW THIS GROUND. 6. THERE IS NO DISPARITY ON THE F ACTS. ON THE BASIS SAME SURVEY REPORT THE GENUINENESS OF THE DONATION HAS BEEN DOUBTED IN THE CASE OF THE ASSESSEE ALSO. THEREFORE THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE ORDER OF THE ITAT IN THE I.T.A NO. 86 /AHD/20 18 A.Y. 2014 - 15 PAGE NO . JAIN JEWELLERS PVT. LTD. VS. IT O 5 CASE OF S.G.VAT CARE P.LTD. WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. IT IS DISMISSED. RESPECTFULLY FOLLOWING THE ABOVE CITED DECISION AND FINDING OF THE CO - ORDINATE BENCH OF THE ITAT ON SIMILAR FACTS AND IDENTI CAL ISSUE THE APPEAL OF THE ASSESSEE IS ALLOWED . 7. IN THE R ESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PR ONOUNCED IN THE OPEN C OURT ON 26 - 11 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 26 /11 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER/ /