Provisions of Section 35(1)(ii) of the Income Tax Act 1961 w.r.t donation paid

This case concerns a donation made by the assessee to a research foundation. The Income Tax Department added back Rs. 5,00,000/- to the assessee's income, citing a survey at the donee's premises which revealed misuse of tax benefits. However, the Tribunal allowed the assessee's appeal, deleting the addition. The decision followed a precedent from a Coordinate Bench, finding no reason to deviate from the established stance.

IN THE INCOME TAX APPELLATE TRIBUNAL
“SMC” BENCH, AHMEDABAD
(CONDUCTING THROUGH VIRTUAL COURT)
BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER &
Ms. MADHUMITA ROY, JUDICIAL MEMBER
ITA No.1724/Ahd/2018
(Assessment Years: 2014-15)

Ramawtar D Gupta-HUF
C/o Haresh Enterpr ises,
Plot No. 2111, Phase-I II, GIDC,
Nr. Trikampura Bus Stop, Vatva,
Ahmedabad-382445

vs

ITO
Ward-1(2) (5)
Ahmedabad

Appellant by : Shri M. K. Patel, AR
Respondent by: Shri R. R. Makwana, Sr. DR
Date of Hearing: 30/09/2021
Date of Pronouncement: 04/10/2021
O R D E R

The issue relates to the addition of Rs. 5,00,000/- under Section 35(1)(ii) of the Income Tax Act 1961 in respect to donation paid to one School of Human Genetics & Population Health (SHG&PH), Kolkata.

2. Brief facts of the case are that the assessee has filed return of incomevon 20.11.2014 declaring total income at Rs.4,47,910/-. On scrutiny of the accounts, it revealed that the assessee-company has given donation to Herbicure Healthcare Bio-Herbal Research Foundation,Calcutta. A survey action was carried out at the premises of the donee wherein it revealed to the Revenue that this concern was misusing the benefit of notification issued by the Income Tax Department. It has been getting donations from various sources, and after deducting certain amount of commission, these donations were refunded in cash. On the basis of that survey report registration granted to its favour was cancelled.

3.In the absence of any changed circumstances we find no reason to deviate from the stand taken by the Coordinate Bench and respectfully relying upon the same we allow the appeal by deleting the addition made by Revenue. Assessee’s appeal is, thus, allowed.

4. In the result, the appeal filed by the assessee is allowed.
This Order pronounced in Open Court on 04/10/2021

Please find attached the enclosed file for the full judgement