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TMI Blog2024 (6) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to as 'the Act'), whereby and whereunder disallowance of deduction under Section 35(1)(ii) of the Act to the tune of Rs. 35,00,000/- claimed by the appellant has been upheld for Assessment Year 2016-17. 2. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record. 3. The brief facts leading to this case is this that the appellant initially filed its return of income for the year under consideration on 16.08.2016 declaring total income of Rs. 66,15,430/- which was processed under Section 143(1) of the Act on 02.10.2016. Upon scrutiny the assessment was completed under Section 143(3) of the Act on 02.08.2018 declaring total income at Rs. 66,15,430/-. Subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000/- claimed on the above expenditure and added back to the total income of the appellant which was further confirmed by the First Appellate Authority. Hence, the instant appeal before us. 5. We have carefully considered the entire aspect of the matter and we find that it appears practically and factually the entity, namely, M/s. Shri Arvindo Institute of Applied Scientific Research Trust having PAN No. AAFTS7349D with whom the donation to the tune of Rs.20,00,000/- was made by the appellant and claimed weighted average deduction of Rs.15,00,000/- under Section 35(1)(ii) of the Act for A.Y. 2016-17, though earlier was approved under Section 35(1)(ii) of the Act, the same was expired on 31.03.2006. Thus, the entity is not recognized fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entity namely M/s Shri Arvindo Institute of Applied Scientific Research Trust (PAN AAFTS7349D) was earlier approved under section 35( 1)(ii) of the Act which expired on 31- 03-2006. Thereafter, this entity, being not recognized for purpose of section 35(1 )( ii) of the Act, is not eligible to raise donations for undertaking scientific research. However, the Trust has raised substantial donations over the last six years on the basis of a forged certificate. It was seen that one of the beneficiaries of such bogus donation is the assessee i .e. M/s. C.K. Zipper Private Limited (PAN- AADCC7700M). 4.2 Accordingly, the claim of the assessee to allow deduction u/s.35( 1)(i) of Rs. 35, 00,000/- was not accepted and disallowed by AO as narrated u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scientific Research Trust( PAN AAFTS 73490) It is also observed that the said entity M/s. Shri Arvindo Institute of Applied Scientific Research Trust(PAN: AAFTS 7349D) do not have requisite recognition duly approved by CBDT. Thus in light of letter issued by CBDT, the deduction so claimed by assessee M/s C.K. Zipper Private Limited ( PAN:AADCC7700 M) is not allowable deduction." Satisfaction of this office: In view of the above facts, the provisions of clause(c) of explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax escaped assessment. The office of undersigned is satisfied that in the case of assessee M/s C.K Zipper Private L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have made the donation but in the absence of statutory approval it is not a deductible expenditure 4.7 However it is observed that the assessing officer has invoked the provisions of section that is unexplained expenditure. Though nowhere in the order it is mentioned or stated as to how the expenditure is unexplained or how the source of the same is unexplained. It is clear the donation is made to an entity not eligible for allowing deduction under the Income tax Act but it nowhere emerges from the assessment order that the donation is from unexplained sources. The AO in his show cause stated as under: "In connection with the assessment proceeding for the AY 2016- 17, you have claimed deduction u/s 35(1 ) (ii) of the IT Act amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim made by the appellant. However, the expenditure was disallowed as unexplained expenditure under Section 69C of the Act. In this regard, the Ld. CIT(A) observed that the same expenditure is unexplained and how the source of the same is unexplained, has not been able to be specified by the Ld. AO while invoking Section 69C of the Act while rejecting the claim of the appellant. However, keeping in view the entire aspect of the matter, the claim made by the appellant on a wrong footing, particularly, when the donation made to the entity which is not eligible to raise donation under Section 35(1)(ii) of the Act, the Ld. CIT(A) upheld the order of disallowance of the claim made by the appellant by the Ld. AO which, in our considered opin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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