TMI Blog2017 (9) TMI 1637X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (2013 (6) TMI 305 - SUPREME COURT). 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). - Decided in favour of assessee - I.T.A No. 2231/Kol/2016 - - - Dated:- 13-9-2017 - Shri A. T. Varkey, JM Shri M. Balaganesh, AM For the Appellant: Shri Miraj D. Shah, Advocate For the Respondent: Shri M. K. Biswas, JCIT ORDER Shri A.T.Varkey, JM This is an appeal filed by the assessee against the order of Ld. CIT(A)-6, Kolkata dated 28.10.2016 for AY 2013-14. 2. The ground nos. 1, 2 and 8 are general in nature and do not require any adjudication. 3. Ground nos. 3, 4 and 5 are against the action of the Ld. CIT(A) in upholding the disallowance of deduction claimed u/s. 35(1)(ii) of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will discuss later) on a bona fide belief they donated the amount taking into consideration that they would enjoy tax benefit at a weighted rate of 175% of the donation. 6. We note that M/s. Herbicure was registered u/s. 12AA of the Act which was granted by the Ld. DIT(E), Kolkata w.e.f. 26.12.2003 vide his Memo dated 03.02.2005 (Paper book page 22). M/s. Herbicure was also having registration u/s. 80G(5)(vi) of the Act which was granted by the Ld. DIT(E). M/s. Herbicure was also having a registration u/s. 6(1)(a) of the Foreign Contribution (Regulation) Act, 1976 which was granted to it on 26.02.2008 vide registration no.147120804. M/s. Herbicure was also recognized in the year 2006-07 as a Scientific Industrial Research Organisation (SIRO) by Ministry of Science Technology, Govt. of India. M/s. Herbicure was also recognized vide gazette notification no. 35/2008 dated 14.03.2008 issued by CBDT, Ministry of Finance u/s. 35(1)(ii) of the Act (Paper book page 23). The Ld. AR drew our attention to letter dated 01.02.2013 by M/s. Herbicure which is evident from page 21 of the paper book wherein the said M/s. Herbicure has requested the assessee for donation u/s. 35(1)(ii) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein we note that on 15.03.2013 by RTGS to M/s. Herbicure Health an amount of ₹ 7,51,000/- as well as on 26.03.2013 by RTGS of ₹ 7,51,000/- was sent to M/s. Herbicure Health. We note that answer given by the founder director of M/s. Herbicure to ADIT, Investigation to question no. 22 and question no. 23 was the basis of disallowance of the claim made by the assessee which is reproduced below: Q. 22. Let me remind you that as one of the Directors of Herbicure Healthcare Bio-Herbal Research Foundation you are duty bound to keep complete information regarding transactions being made by the said entity and the genuineness of persons/entities with whom the said transactions are being made. Your attention is further been drawn to the computer extracts taken out of the tally which was found in your e-mail. These pages are related to the bank book of Herbicure Healthcare Bio-Herbal Research Foundation wherein it is clearly reflected that the amount of ₹ 25 lakh (in two trenches) received from OCL India Ltd on 15.07.2011, ₹ 25 lakh received from OCL India Ltd. on 11.08.2011 17.08.2011 are immediately being transferred to A.S. Enterprises which is a paper com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Bhawanipore near Netaji Subhas Metro Station. The modus is like this. The information is given to us by Mr Kishan Bhawasingka as to bogus donation entry is needed by a particular party. Sometimes we come to know about the accommodation entry being given to a party when we directly receive communication from the concerned bank that the amount has been credited. Thus, the accommodation entry is completely controlled and managed by Mr. Kishan Bhawasingka. The bogus donations are received vide cheque/RTGS into any of the bank accounts mentioned by m in response to question no.7 of this statement. After this payment is made to any of the paper / bogus companies on account of bogus purchase/expenses on the advice of Mr Kishan Bhawasingka. The remaining transaction is also managed on paper by him only which happens in the form of routing of the donation amount through his bogus/paper companies in 2 to 3 layer. Finally, cheque of the donation amount (after deducting the cut of commission charged by us and broker Mr Kishan Bhawasingka) is given back to the original beneficiary who gave donation to us. Sometimes, the amount is withdrawn at 3rd or 4th level and cash is given back to the ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Shri Swapan Ranjan Dasgupta regarding the purported deposition made at the time of survey. However, AO did not grant him that opportunity to cross examine Shri Swapan Ranjan Dasgupta. We also note that the AO issued notice u/s. 131 of the Act to the partners of the assessee firm and has recorded their statement on oath on 28.12.2015. We note for question no. 14 as to how the partner knew about M/s. Herbicure, the partner of the assessee firm has answered that Dr. Bhuban Chakraborty, a Cardiologist friend introduced them to M/s. Herbicure and to question no. 15 as whether the partners have visited the office of M/s. Herbicure to which the partners answered that they had visited the premises of M/s. Herbicure on two occasions and for question no. 16 as to whether the partners were satisfied with the work of scientific research carried on by the said M/s. Herbicure, the partners of the assessee firm had replied that during their visit at Pailan and Baral they were satisfied with the scientific research work and for question no. 17 the partners replied that they had seen the certificate issued by Govt. of India and also have gone through the research paper of the people working there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to acute lumber scoliosis and am not able to move. I am under strict medical supervision. As such, my personal appearance may kindly be waived on compassionate ground. I am attaching the current medical prescription/advice along with MRI reports for your kind record. However, the information as submitted above may please recorded as my witness. 10. Thus we note from the entire facts and circumstances, that the 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 confirmed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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