Section 80GGC deduction for political donations cannot be denied on mere accommodation-entry allegations absent nexus evidence.

Deduction under section 80GGC for a donation to a political party cannot be disallowed merely because the party is alleged to have provided bogus accommodation entries. In the absence of material showing refund of the donation, receipt of commission, or any direct nexus between the alleged tainted party and a benefit to the assessee, the adverse disallowance is not sustainable. The note applies parity with a coordinate bench view and treats the allegation alone as insufficient to deny the deduction.

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Issues: Whether disallowance of deduction under section 80GGC of the Income-tax Act, 1961, in respect of donation to a political party could be sustained merely on the allegation that the party was involved in providing bogus accommodation entries, without any material showing refund of donation or a direct nexus of benefit to the assessee.

Analysis: The assessee had claimed deduction for donation to a political party, and the assessment was reopened on information from the investigation wing alleging accommodation entries. The record did not disclose any evidence that the political party had taken commission, returned money to the assessee, or otherwise established a direct nexus between the alleged tainted party and any benefit derived by the assessee. On parity of facts with the cited coordinate bench decision, the adverse disallowance could not be maintained.

Conclusion: The disallowance of Rs. 1,00,000 under section 80GGC was deleted and the issue was decided in favour of the assessee.

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