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TMI Blog2021 (11) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Hon'ble CIT(Appeal) has confirmed the addition (i.e addition of Rs. 3,50,000/-) made by Ld. AO. The addition is made as well as confirmed without bringing any corroborative evidence on record. 3. The Hon'ble CIT(Appeal) has failed to understand the genuineness of the donation made by the assessee even though the assessee has provided all the details which were sufficient to prove that the donation made by the assessee is genuine. The Hon'ble CIT(Appeal) has not considered the details which were submitted by the assessee during the course of hearing and passed the order. The Hon'ble CIT(Appeal) has failed to understand that the donation was made by the assessee when the trust had valid approval in force. The Hon'ble CIT [Appeal) has passed the order without providing the opportunity of cross examination. The Hon'ble CIT(Appeal) has failed to understand that the assessee has given donation as charity and not to avail higher deduction for the purpose of tax evasion. On the facts and in the circumstances of the case and in law, the charging of interest under section 234B, 234C and 234D of the I.T. Act, 1961 are invalid and bad in law and even initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount statements, copy of statement of computation of total income, P&L Account and Balance Sheet of the appellant for the year ended on 31.03.2014. The Ld. AR also furnished copy of notification in the Gazette of India dated 28.01.2010 to demonstrate that the trust was accorded approval by CBDT for the purpose of section 35(1)(ii). The Ld. AR also furnished copy of renewal of Recognition of Scientific & Industrial Research Organizations dated 01.04.2013 along with copy of notification dated 15.09.2016 issued by Director to Government of India, CBDT revoking the benefits of section 35(1)(ii) which have been conferred on the trust." 7. Learned CIT(A) while dismissing the appeal has concluded as under:- 7.2.7 The fact that appellant has failed to produce the alleged party or contact the alleged party and obtain confirmation indicates that such purported transactions are questionable as far as genuineness is concerned and in this context when the primary onus of proof has not been discharged by the appellant it is not tenable to complain that cross examination of the alleged party was not provided to the appellant. In this regard, reference is made to the ratio laid down by the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R&D also belongs 'to the parent company. The assessee cannot blow hot and cold at the same time by claiming capital expenditure on R&D on its own account and revenue expenditure on R&D in the account of its parent company. In any case of the mater, the assessee has not brought any evidence before us to conclusively prove that the capital expenditure claimed a deduction u/s. 35(1)(iv) of the Act is related to R&D activities carried on for assessee's own business. In that view of the matter, one of the conditions of the section 35(1)(iv) of the Act is not Justified. In other words, the assesses has failed to prove that the scientific research in relation to which capital expenditure was incurred is carried on for assessee's own business. That being the case, assessee is not eligible to claim deduction Under Section 35(1)(iv) of the Act. Resultantly the Assessing Officer was in error while allowing deduction claimed Under Section 35(1)(iv) of the Act which has caused prejudice to the revenue. Therefore, CIT was justified in revising the Assessment Order by invoking his powers Under Section 263 of the Act. Before parting we may briefly analyze the decisions cited before its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been made has been made found to be bogus entity, at the same time learned CIT(A) says that since assessee has not produced the party or obtained a confirmation, it cannot be said that the payment is made to the said party. It is further strange that the assessee's plea of cross examination opportunity the said party is being rejected by counter observation that the same party has not been produced by the assessee. Be as it may I note that the issue is squarely covered against the Revenue by the decision of the ITAT in the case of Sopariwala Exports Pvt. Ltd. (ITA No. 2039/Mum/2018 vide order dated 17.6.2021) has decided the identical issue in favour of the assessee by observing as under:- 11. Upon careful consideration we note that identical issue was decided in favour of the assessee in the aforesaid decisions of the ITAT. We may refer to the decision in the case of Kitchen Essentials (supra) as under:- "We have heard the rival submissions and perused the material on record including the decisions cited by the ld. AR. The undisputed facts are that the assessee has made donations of Rs. 50 lakhs to the "The School of Human Genetics and Population Health" and claimed de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 1962. In the assessment year 2013-14, the assessee claimed weighted deduction of Rs. 4,81,25,000/- under section 35(1) (ii) of the Act, which is 175% of the amount of donation being the sum of Rs. 2,75,00,000/- in respect of the donation given to 'The School of Human Genetics and Population Health'. We note that the Notifications to this effect, that these two institutions viz. 'Matrivani' and 'SHG', were approved by the Central Government for the purpose of section 35(1)(ii) of the Act, was published in the Gazette of India. However, the deduction claimed by the assessee was denied by the Assessing Officer on the basis of the allegations contained in the report of the Investigation Wing of Kolkata that the said donations were bogus. The reasons stated therein, in short, were that statements of some key persons of these two donee institutions were recorded by the Investigation authority in course of survey proceedings in their cases. The said key person, in their statements, accepted to have received donations from various entities in lieu of cash returned to them after deducting commission there from. 14. We note that, during the course of hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances, 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 by Hon'ble Supreme Court in K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the instant case. In fact the assessee's case herein falls on a much better footing than the facts before the Hon'ble Apex Court. In the case before Hon'ble Apex Court, the power of cancellation of registration us 12A of the Act was conferred by the Act on the ld. CIT w.e.f. 1.10.2004 and the Hon'ble Apex Court held that prior to that date, no cancellation of registration could happen. But in the instant case, there is absolutely no provision for withdrawal of recognition u/s. 35(1)(ii) of the Act. Hence we hold that the withdrawal of recognition u/s. 35(1)(ii) of the Act in the hands of the payee organizations would not affect the rights and interests of the assessee herein for claim of weighted deduction u/s. 35(1)(H) of the Act." 16. In view of the aforesaid findings in the facts and circumstances of the case and respectfully following the various judicial precedents relied upon hereinabove, we direct the ld. AO to grant deduction u/s. 35(1)(ii) of the Act, in the sum of Rs. 4,81,25,000/- for A. Y, 2013-14 and in the sum of Rs. 10,50,00,000/-, for A. Y. 2014-15, as claimed by him under section 35(1)(ii) of the Act in respect of the amounts of donati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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