ITAT rules in favor of assessee due to lack of evidence; donation not deemed bogus post-certificate cancellation.

The ITAT allowed the appeal, ruling in favor of the assessee, as there was insufficient evidence to support treating the donation as bogus. The cancellation of the donee's certificate occurred after the donation, and there was no specific proof to question the donation's genuineness. The ITAT noted the absence of concrete evidence from the survey team and the lack of a mechanism for the assessee to verify the donee's authenticity at the time of donation. Consequently, the ITAT held that the donation could not be deemed bogus based solely on subsequent events.

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Issues:
Appeal against addition of donation made to a foundation.

Analysis:
The appeal before the ITAT Ahmedabad was against the addition of a donation made by the assessee to a foundation. The assessee had filed the return of income declaring total income, and during the scrutiny, it was found that the donation made to Herbicure Healthcare Bio-Herbal Research Foundation was being misused. The AO treated the donation as bogus based on a survey report, and the CIT(A) upheld the addition.

The assessee contended that at the time of donation, the donee was a notified eligible institution, and the certificate for receiving donations was canceled later. The assessee argued that there was no mechanism to verify the genuineness of the donee at the time of donation.

The Departmental Representative argued that investigations revealed the bogus nature of the affairs conducted by the donee, justifying the treatment of the donations as bogus.

Upon careful consideration, the ITAT found that the AO relied on general information from the survey team without recording specific statements from the donee's representatives. There was no evidence to show that the donations were refunded in cash after deducting commission. The ITAT noted that the cancellation of the certificate occurred two years after the donation, and there was no specific evidence to doubt the genuineness of the donation. As there was no mechanism for the assessee to verify the donee's authenticity, the ITAT allowed the appeal, stating that the donation cannot be doubted solely based on subsequent events.

In conclusion, the ITAT allowed the appeal of the assessee, emphasizing the lack of concrete evidence to support the addition of the donation as bogus.

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