Political Party Tax Planning or Evasion

Person/Business house makes donation to a political party, claims deduction and gain tax benefit. Political party will return the same amount to his relative or business as loan. Political party is easy to form. Search google and website of election commission of India. There are almost 1800 parites in India.

We can show the interest on loans as income from other sources and claim them exempt. When a person pays a donation to my political party and claims deduction from the same, he will get a tax benefit. I will charge a percentage of his tax benefit and ask him to pay the amount in cheque. I will show that cheque as interest paymet. He wil make this payment just one time. Then the loan will be shown as it is for 5-10 years. After that the loan will be written off.

Same can be done to business. When the loan is written off, ITO cannot add the loan to the business under section 41 as the business will show the loan as capital receipt.

My question is can ITO do anything?