TMI Blog2020 (2) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... . A.L. Saini, Accountant Member For the Appellant : Mrs. Shika Agrawal, ACA For the Respondent : Shri Dhrubajyoti Ray, JCIT-DR ORDER PER S.S.GODARA, JUDICIAL MEMBER:- This assessee s appeal for assessment year 2012-13 arises against the Commissioner of Income Tax (Appeals)-20, Kolkata s order dated 02.10.2018, involving proceedings u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961; the Act . Heard both the parties. Case file perused. 2. Learned counsel representing assessee states at the bar that it does not wish to press for the former two substantive grounds that the CIT(A) has erred in law and on facts in passing his lower appellate order ex parte as well as other issue of validity of sec. 147 proceedings. Her only case is that both the lower authorities have erred in law and on facts in treating the assessee s sec. 35(1)(ii) deduction claim of ₹1,75,00,000/- as a mere accommodation entry. The CIT(A) s detailed discussion to this effect reads as under:- 6. On the claim of deduction u/s.35(1)(ii). As stated above at Para 4, the discussion in the impugned assessment order is detailed on facts, and in law. it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Government of India The Grounds of Appeal pertaining to deduction u/s 35(1)(ii) are Dismissed. The disallowance at ₹1,75,00,000/- is Confirmed . 4. After giving our thoughtful consideration to rival pleadings against and in support of the impugned disallowance, we find that this issue of sec. 35(1)(ii) deduction in case of School of Human Genetic and Population Health is no more res integra . This tribunal s co-ordinate bench s decision in Prakash Ply Centre Pvt. Ltd. vs. DCIT, Central Circle-3(3), Kolkata in IT(SS)A No. 7/Kol/2017 decided on 18.09.2019 has declined the Revenue s identical argument in case of very recipient as under:- 8. We now come to the taxpayer s appeal IT(SS)A No.07/Kol/2017 raising the latter issue of disallowance of sec. 35(1)(ii) deduction on account of its contribution made to the School of Human Genatics and Population Health . Both the lower authorities hold the above recipient organisation to be engaged in accommodation entry providing business than carrying out any scientific research and development. Learned CIT-DR refers to the lower authorities respective findings in seeking to confirm the impugned di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving as follows :- 4.1. 1 have considered the submission of the appellant and perused the relevant assessment records. The M/S School of Genetics and Population Health, Kolkata had been granted approval u/s 35(1)(ii) of the I.T Act, 1961 vide Notification 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.11 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, donation of ₹ 15,00,000/- was made on 31.03.2014 by the assessee. The said amount was given to the donee on 31.03.2014 and withdrawal was on 15.09.2016. i.e. after 17 months from the date of donation made in March, 2014. Such withdrawal in my view cannot take away the vested 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is allowed. 7.3 The Kolkata ITAT in the case of Zenith Credit Corporation in ITA No.718/Kol/2018 pronounced on 20th July, 2018 held as follows:- This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-10, Kolkata, (hereinafter the Ld. CIT(A) ), dt. 23/02/2017, passed 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 ₹ 3,50,000/- on the donation of ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities to make this addition. 3. After hearing rival contentions, perusing the papers on record, orders of the authorities below as well as case-law cited, I hold as follows:- I find that in the statement recorded from Shri Avijit Sinha Roy u/s 131 of the Act, on 13/04/2015 he states that after the month of February, 2011, he left this bogus donation work. On the other hand, he has 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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. 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
