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2020 (4) TMI 399 - AT - Income TaxDisallowance u/s. 35(1)(ii) deduction claim - recipient concern, M/s. Heribicure Healthcare Bio- Herbal Research Foundation was found as an accommodation entry provider - Disallowance based on statement recorded on oath during survey - HELD THAT:- As decided in RAJ KARAN DASSANI VERSUS ITO, WARD - 36 (1) , KOLKATA [2019 (5) TMI 840 - ITAT KOLKATA]AO got swayed away with the statement recorded on oath of Mr. Swapan Ranjan Dasgupta during survey conducted at the premises of M/s. Herbicure. We have reproduced Question no. 22 and 23 and answers given by Shri Swapan Ranjan Dasgupta, wherein he admits to provide accommodation entries in lieu of cash. This information we should say can be the tool to start an investigation when the assessee made the claim for weighted deduction. The general statement of Shri Swapan Ranjan Dasgupta against donation made the claim of assessee for deduction suspicious. However, when the AO investigated, Shri Swapan Ranjan Dasgupta has confmned that M/s. Herbicure was in receipt of the donation and it has not given any refund in cash, then the sole basis of disallowance of claim as a matter of fact disappeared. It should be remembered suspicion howsoever strong cannot take the place of evidence. The confirmation from Shri Swapan Ranjan Dasgupta the claim of the assessee for weighted deduction u/s. 35(1)(ii) of the Act. The sole basis of the addition/disallowance based on statement recorded on oath during survey cannot be allowed as held by Hon'ble Supreme Court in Kader Khan & sons (supra). Moreover, we note that if the AO was hell bent determined to disallow the claim of the assessee, then he should have granted an opportunity to cross examine Shri Swapan Ranjan Das Gupta and Shri Kishan Bhawasingka as held by Hon'ble Supreme Court in Andaman Timber [2015 (10) TMI 442 - SUPREME COURT] We cannot sustain the order of the authorities below. Therefore, we set aside the impugned order and direct the AO to allow the deduction u/s. 35(1)(ii) - Decided in favour of assessee.
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