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TMI Blog2019 (5) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... h are paid before the filing of return of income and (b) the claim of deduction u/s 35(1)(ii) of the Act, of donation given to M/s School of Genetics and Population Health, Kolkata. For the Assessment Year 2014-15, the only issue is disallowance of deduction claimed u/s 35(1)(ii) of the Act for a donation given to School of Genetics and Population Health, Kolkata ('SHG &PH') 4. We have heard Mr. S.M. Surana, the ld. Counsel for the assessee and Mr. Robin Choudhury, the ld. Departmental Representative for the revenue. On a careful consideration on the facts and circumstances of the case, perusing the papers on record and orders of the authorities below as well as case laws cited, we hold as follows. 5. We first take up Ground No.1 for the Assessment Year 2013-14 regarding the issue of claim of deduction of PF & ESI dues. The undisputed fact is that these dues have been paid before the specified due date of filing return of income u/s 139(1) of the Act. The Assessing Officer denied the deduction on the ground that the payment was made beyond the due date of payments specified in the relevant enactment. This issue is covered in favour of the assessee. As the payments are made prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 4/201O/F. o. 203/64/2009/ITAT dated 28.01.2010 in the Official Gazetted by the Central Government. Any expenditure to such Notified .Institution which has as its object the undertaking of scientific research is eligible for weighted deduction equal one and three fourth times of any sum paid. However, the Ministry of Finance (Department of Revenue ) (Central Board of Direct Taxes) Vide Notification No. 82/2016/F.No. 203/64/2009/IT A.I1 dated 15.09.2016 in The Gazette of India: Extra Ordinary had rescinded the Notification granting approval by the Central Government to the appellant for the purpose of clause (ii) of sub section (1) of section 35 of the I.T. Act, 1961, read with Rule 5C and 5E of the Income tax Rule, 1962. The Notification reads as follows: "'Ministry of Finance, (Department of Revenue) (Central Board of Direct Taxes) Notification New Delhi, the 15th September, 2016, S.O. 2961(E)-In exercise of the powers conferred under clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 read with Rule 5e and 5E of the Income-tax Rules, 1962, the Central Government hereby rescinds the notification of the Government of India, Ministry of Finance, Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right of the assessee for claiming deduction under Section 35 (1) of the Act. 7.2 The Tribunal in the case of Rajda Polymers vide ITA No.333/Kol/2017 order dated 08.11.2017 at page 7 has held as follows :- "5.6. We find that the ld CITA had made an observation which has been heavily relied upon by the ld DR that the assessee's line of business has got nothing to do even remotely with the healthcare or herbal healthcare industry much less in the area of research thereon and accordingly there was no need for the assessee to give donation of Rs. 14,00,000/- to HHBRF . We find that this aspect has been duly addressed by the assessee by stating that one Cardiologist Doctor had introduced the assessee to HHBRF and donations were given after due satisfaction of the assessee based on personal visits to the two research centres of HHBRF and activities carried on by them. Moreover, it is well settled that it is always the prerogative of the assessee to give or not to give any donation to a particular institution, which wisdom cannot be questioned by the revenue. The question of business expediency of an expenditure had to be viewed from the point of view of the businessman and not from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s 250 of the Income Tax Act, 1961 (hereinafter the 'Act'), relating to Assessment Year 2014-15, on the following grounds:- "1. For that the Ld. CIT(Appeals) was wrong and unjustified in confirming the disallowance of deduction u/s 35(1)(ii) of Rs. 3,50,000/- on the donation of Rs. 2,00,000/- made to School of Human Genetics & Pollution Health without properly appreciating the submission of the appellant. The court decisions cited by the Ld. CIT(Appeals) are not applicable in the facts of the appellant's case. 2. For that the appellant craves leave to alter, amend, modify any of the grounds and/or take additional ground before or at the time of hearing of this appeal." 2. Heard both the parties. The ld. Counsel for the assessee submits that from the statement recorded and relied upon by the Assessing Officer of Shri Avijit Sinha Roy, it is clear that he stated that after February, 2011, he left this activity of providing bogus donations for commission. He drew the attention of the Bench to page 3 para 6.6. of the assessment order and submitted that the donation in question was made on 03/06/2014. Thus, he submits that reliance placed on this statement of Shri Avijit Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signed a declaration on 30/07.2015. The list prepared by the revenue was signed with a remark that he has seen the list. There is a contradiction in these two. In such circumstances, it has to be seen as to which is correct. No opportunity of cross-examining Shri Avijit Sinha Roy has been provided to the assessee. Hence the declaration as well as the statement cannot be the basis of addition. Similarly, the statement of the key persons of the trust cannot be the basis of addition as no cross-examination of witness was provided. No proof of money being returned is available with the revenue. 3.2. Similar view was taken by the 'B' Bench of the Tribunal in the case of DCIT vs. M/s. Maco Corporation (India) Pvt. Ltd. in ITA No. 16/Kol/2017; Assessment Year 2013-14, order dt. 14/03/2018. 4. Consistent with the view taken therein, we allow this appeal of the assessee and direct the Assessing Officer to grant the necessary deductions. 5. In the result, appeal of the assessee is allowed. 7.3 We also find that similar issue came up before the co-ordinate bench of this tribunal in the case of Saimed Innovation vs ITO in ITA No. 2231/Kol/2016 for Asst Year 2013-14 dated 13.9.2017, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. For question no. 20 they have given the name of the doctor who was a Cardiologist who introduced them to M/s. Herbicure. We note that the AO enquired about Dr. Bhuban Chakraborty's address for which the partner replied that the doctor resides at Kshudiram Sarani, Rathtala, Kolkata. For question no. 21 as to whether they knew about the Directorate of Investigation, Kolkata carried out survey u/s. 133A and that its investigation is found that the activities were not genuine, the partners replied that they were not aware of the survey, however, they added that after their visit of the two centers they were on a bonafide belief that M/s. Herbicure was a competent institute and based on the recommendation of the Cardiologist Dr. Bhuban Chakrabrty they made donation to the said concern. We also note that the AO issued summons to Shri S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt 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 fortifies 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 (supra). 11. In the light of the aforesaid facts and circumstances, we cannot sustain the order of the authorities below. Therefore, we set aside the impugned order and direct the AO to allow the deduction of Rs. 26,28,500/- u/s. 35(1)(ii) of the Act. 12. In the result, appeal of assessee is assessee is allowed". 8. The facts of this case as identical with the facts of this case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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