Bogus political donation claim under section 80GGC fails where cheque payment was found to be a sham and returned in cash.

Deduction under section 80GGC was denied where a cheque payment claimed as a political donation was found, on substantive evidence, to be part of a sham arrangement and the amount was returned to the donor in cash. The record, including statements recorded during search proceedings, absence of contribution reports, non-compliance with exemption conditions, and the involvement of intermediary entities, supported the finding that the alleged donation was not a genuine political contribution. The disallowance was therefore sustained in favour of the Revenue.

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Issues: Whether deduction under section 80GGC of the Income-tax Act, 1961 was allowable on a donation made by cheque to a political party, where the authorities found the donation to be bogus and the amount to have been returned in cash.

Analysis: The donation claim was examined in the background of statements recorded during search proceedings, the absence of contribution reports, the party's non-compliance with exemption conditions, and the finding that the alleged donation was part of a layered arrangement through intermediary entities. The record was treated as showing that the cheque donation was not a genuine political contribution but a sham transaction used in a bogus donation scam, and the earlier authorities' findings were not displaced by contrary material.

Conclusion: The deduction under section 80GGC was not allowable, and the disallowance was rightly sustained in favour of the Revenue.

Ratio Decidendi: A deduction for political donations cannot be allowed where the payment is found, on substantive evidence, to be part of a bogus or sham transaction and the donated amount is shown to have been returned to the donor in cash.

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