Successful appeal due to lack of evidence questioning donation genuineness under Income Tax Act

The appeal was allowed as the Revenue did not doubt the donation and no new circumstances arose. The rejection of the donation benefit under section 35(1)(ii) of the Income Tax Act, 1961 was deemed unjustified due to lack of concrete evidence to question the genuineness of the donation, following a Co-ordinate Bench precedent. The addition made by the authorities below was deleted, and the assessee's appeal against the rejection of the donation benefit was successful.

---

---

Issues:
Appeal against rejection of donation benefit under section 35(1)(ii) of the Income Tax Act, 1961 due to withdrawal of approval by CBDT.

Analysis:
1. The appeal was filed against the rejection of the benefit of a donation of Rs. 10 lakh given by the assessee to a Kolkata-based company, Herbicure Healthcare Bio Herbal Research Foundation (HHBRF), as the approval granted to the foundation was withdrawn by a CBDT notification.

2. The assessee contended that the donation was made before the cancellation of approval by CBDT and cited precedents to support their case, including a judgment in a similar matter (ITA 2318/Ahd/2017 for AY 2014-15) where the appeal by the Revenue was rejected based on a Co-ordinate Bench judgment in the matter of S.G. Vat Care Pvt. Ltd. vs. ITO.

3. The Co-ordinate Bench judgment mentioned the case of S.G. Vat Care P.Ltd., where a similar donation was disallowed by the AO but later deleted by the Tribunal. The Tribunal found that the AO did not have specific evidence to doubt the donation and allowed the appeal, stating that in the absence of concrete evidence, the donation cannot be considered bogus.

4. The Tribunal noted that the facts in the present case were similar to the S.G. Vat Care P.Ltd. case, where the genuineness of the donation was doubted based on a survey report. As the Revenue did not doubt the donation in the present case and there were no changed circumstances, the appeal by the assessee was allowed, and the addition made by the authorities below was deleted.

5. The Tribunal, relying on the Co-ordinate Bench's judgment, allowed the appeal filed by the assessee, emphasizing that since the Revenue did not doubt the donation and there were no new circumstances, the rejection of the donation benefit was not justified.

6. In conclusion, the assessee's appeal against the rejection of the donation benefit was allowed based on the lack of concrete evidence to doubt the genuineness of the donation, as established by the Co-ordinate Bench's precedent in a similar case.

---