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2016 (8) TMI 904 - ITAT VISAKHAPATNAM

2016 (8) TMI 904 - ITAT VISAKHAPATNAM - TMI - Disallowance of deduction towards donation paid to political party u/s 80GGC - A.O. disallowed deduction for the reason that donation to JOGO party is not proved with necessary evidences- Held that:- The assessee has paid donation to JOGO party by way of cheques. The assessee has furnished cheque details for having paid the amount. The assessee also furnished details of political party along with confirmation letter issued by the JOGO party. On perus .....

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registered political party u/s 29A of the Representation of People Act, 1951. The contribution return in form No. 24A filed with Election Commission of India, indicate the name and address of donor details. Therefore, we are of the view that the A.O. was erred in disallowing deduction claimed u/s 80GGC of the Act. Hence, we set aside the CIT(A) order and direct the A.O. to delete the addition. - Decided in favour of assessee - Addition of unexplained creditor’s - A.O. made additions towards .....

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ed from the previous year. In the present case on hand, on perusal of facts, we find that all creditors are brought forward from last years and paid during the current financial year. Therefore, we are of the view that the A.O. was erred in treated sundry creditors brought forward from last year as unexplained creditors. The CIT(A) after considering details filed by the assessee and also taken in to account remand report of the A.O. deleted addition made by the A.O. The facts remain same even be .....

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hand furnished copy of Axis bank account which was recorded in the regular books of accounts. On perusal of bank statement of Axis bank, we find that there are only two cash deposits of ₹ 1600 on 8-7- 2008 and ₹ 8900/- on 18-11-2008 for which sources has been explained. Therefore, we are of the view that the A.O. has made additions without any base. The CIT(A) after considering relevant details filed by the assessee and also taken into account remand report of A.O. deleted additions .....

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of the assessee for the reason that the assessee is the proprietor of M/s India Battery Works and Labelle Slimming and Beauty Clinic. We further noticed that she had reported gross sales income of ₹ 49,31,376/- from trading activity and indirect income of ₹ 16,49,400/- from the business of India Battery Works and Labelle Slimming and Beauty Clinic. The assessee has proved that she had incurred expenditure being interest on loan and depreciation on motor car used for the purpose of b .....

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t by : Shri Aravindakshan, DR ORDER Per G. Manjunatha, Accountant Member These cross appeals filed by the assessee, as well as revenue are directed against separate, but identical orders of the Commissioner of Income -Tax (Appeals), Vijayawada dated 28-03-2014 for the Asst. Year 2009-10. Since, the facts are identical and issues are common, they are heard together and disposed off, by this common order for the sake of convenience. 2. The brief facts of the case as stated in ITA.No. 393/Vizag/201 .....

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43(3) of the Act and determined total income of ₹ 1,17,07,175/- by making following additions. (a) Unexplained deduction u/s 80GGC ₹ 54,00,000/-. (b) Un explained sundry creditors ₹ 50,61,086/-. (c) Un explained cash deposits to ICICI Bank ₹ 7,83,162/-. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before, the CIT(A), the assessee has filed elaborate written submission along with necessary evidences for donation paid to politica .....

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n into account remand report of the A.O. held that as per the provisions of sec. 80GGC, any donation paid to a political party which is recognized by the Election Commission of India is allowed as deduction. The assessee has paid donation to JOGO party which is not recognized by the Election Commission of India. Further, the assessee has not proved donation with confirmation letter from the political party. With these observations confirmed disallowance of deduction claimed u/s 80GGC of the Act. .....

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unt, by holding that the assessee has proved that he had not maintained any bank account with ICICI Bank. The A.O. failed to counter with evidence, the contention of the assessee that he does not have any bank account with ICICI Bank. Aggrieved by the CIT(A) order, the assessee as well as revenue are appeal before us. 4. The first issue that came up for our consideration from the assessee appeal is disallowance of deduction towards donation paid to political party u/s 80GGC of the Act. The facts .....

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mation letter, therefore, the A.O. disallowed donation paid to JOGO party as unexplained deduction. The A.O. was of the opinion that donation to any political party which is recognized by the Election Commission of India is deductible u/s 80GGC of The Act. The assessee has failed to furnish required details so as to prove genuineness of donation paid to JOGO party along with particulars of recognition and also confirmation letter from the party, therefore disallowed the claim made by the assesse .....

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to JOGO party, which is registered u/s 29A of the Representation of People Act, 1951. The donation has been paid by cheque and the proof of payment along with receipts, confirmation letters and details of registration with Election Commission of India is furnished to the CIT(A). The assessee also furnished report filed by the JOGO party with Election Commission of India in Form No. 24A, which contained the particulars of name and address of donor. The A.R. further submitted that donation paid b .....

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ndia. Therefore, addition made by the A.O. should be deleted. The Ld. D.R., on the other hand, strongly supported CIT(A) order. 6. We have heard both the parties and perused materials available on records. The A.O. disallowed claim of deduction u/s 80GGC of the Act, towards donation paid to JOGO party. The A.O. was of the opinion that any donation paid to a political party, which is recognized by the Election Commission of India is allowed as deduction u/s 80GGC of the Act. The A.O. further was .....

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led by the JOGO party with Election Commission of India in Form No. 24A, which contained the particulars of name and address of donor. Therefore, the lower authorities were erred in disallowing deduction claimed u/s 80GGC despite furnished all the required details. 7. The A.O. disallowed deduction for the reason that donation to JOGO party is not proved with necessary evidences. The A.O. further held that JOGO party is unrecognized political party, therefore, any donation to a unrecognized polit .....

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deductible u/s 80GGC of the Act. The only requirement is that the political party must be registered u/s 29A of the Representation of People Act, 1951 and the payment must be made other than by cash. 8. In the present case on hand, on perusal of facts, we find that the assessee has paid donation to JOGO party by way of cheques. The assessee has furnished cheque details for having paid the amount. The assessee also furnished details of political party along with confirmation letter issued by the .....

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party is unrecognized registered political party u/s 29A of the Representation of People Act, 1951. The contribution return in form No. 24A filed with Election Commission of India, indicate the name and address of donor details. Therefore, we are of the view that the A.O. was erred in disallowing deduction claimed u/s 80GGC of the Act. Hence, we set aside the CIT(A) order and direct the A.O. to delete the addition. 9. The next issue emanates from Revenue appeal is deletion of unexplained credito .....

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transaction and creditworthiness of the parties. It is the contention of the assessee that all the creditors are brought forward from last financial year and many are squared up fully or partly during the financial year. The assessee further contended that he had filed confirmation letter along with ledger extract of creditors to prove the identity, genuineness and creditworthiness of the parties. Therefore, the A.O. was not correct in making addition towards trade creditors. 10. We have heard .....

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the financial year. The assessee further contended that all the creditors are payable towards purchase of materials from the parties and all the accounts are running current account with suppliers. The assessee had filed confirmation letter along with ledger extract of creditors to prove the identity, genuineness and creditworthiness of the parties. We find force in the arguments of the assessee. The assessee has filed paper book. On perusal of paper book filed by the assessee, we find that he .....

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he nature and source thereof, or explanations offered by the assessee is not in the opinion of the A.O. satisfactory, then sum so credited may be charged to income tax as the income of the assessee of that previous year. A plain reading of section 68 of the Act, makes it clear that any sum found credited in the books of accounts of the assessee is not explained to the satisfaction of the A.O., then sum found credited shall be treated as income of the assessee of that previous year. In other word .....

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lso taken in to account remand report of the A.O. deleted addition made by the A.O. The facts remain same even before us. The revenue has failed to prove the findings of fact recorded by the CIT(A) is incorrect. Therefore, we upheld the CIT(A) order and delete the addition made by the A.O. 12. The next issue that came up for our consideration is addition towards unexplained cash credits into ICICI Bank account. The A.O. made additions towards cash deposits to ICICI Bank account u/s 69 of the Act .....

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ssee has not maintained any bank account with ICICI Bank and this fact was not disputed by the revenue. The assessee, on the other hand furnished copy of Axis bank account which was recorded in the regular books of accounts. On perusal of bank statement of Axis bank, we find that there are only two cash deposits of ₹ 1600 on 8-7- 2008 and ₹ 8900/- on 18-11-2008 for which sources has been explained. Therefore, we are of the view that the A.O. has made additions without any base. The C .....

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