Tribunal grants relief to assessee, overturns disallowance under Income Tax Act.

The Tribunal upheld the assessee's appeal, allowing the claim and deleting the disallowance of Rs. 52,50,000 under section 35(1)(iii) of the Income Tax Act, 1961. The Tribunal found merit in the assessee's argument that the donation was made with proper approval from the Government of India, supported by evidence. Citing a judgment by the Hon'ble Gujarat High Court, the Tribunal ruled in favor of the assessee based on the evidence presented, ultimately overturning the decision of the ld. CIT(A) and granting relief to the assessee for the Asstt. Year 2014-15.

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Issues:
Challenge to deletion of disallowance under section 35(1)(iii) of the Income Tax Act, 1961.

Analysis:

Issue 1: Disallowance under section 35(1)(iii) of the Income Tax Act, 1961

- The appeal was filed by the Revenue against the order of the ld. CIT(A) for the Asstt. Year 2014-15, challenging the deletion of disallowance of Rs. 52,50,000 under section 35(1)(iii) of the Act.
- The assessee had given a donation of Rs. 30.00 lakhs to a specific institution and claimed it as a deduction under section 35(1)(ii). However, a survey revealed that the institution was misusing benefits by indulging in bogus donations. The ld. AO considered the donation as bogus based on this information.
- The assessee contended that the donation was made when the permission/approval granted by the Government of India was in force, and provided evidence to support their claim. The ld. CIT(A) allowed the claim of the assessee.
- The Tribunal referred to a judgment by the Hon'ble Gujarat High Court in a similar case, where the claim of the assessee was allowed based on evidence provided. The Tribunal found merit in the claim of the assessee and deleted the disallowance under section 35(1)(ii) of the Act.
- The Tribunal noted that since the issue was covered in favor of the assessee by the cited judgment, they upheld the claim and allowed the appeal of the assessee.

This detailed analysis of the legal judgment highlights the issues involved, the arguments presented, and the final decision made by the Tribunal regarding the challenge to the deletion of disallowance under section 35(1)(iii) of the Income Tax Act, 1961.

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