TaxTMI 
TaxTMI 
2023 (3) TMI 150
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....reflected in Form 26AS. Grounds of appeal are not reproduced for the sake of brevity. 3. Brief facts of the case are that, assessee filed its return of income on 29/09/2015, reporting total income of Rs.56,66,010/-. Case of assessee was selected for scrutiny through CASS for which statutory notices were issued and served and were duly complied with by the assessee. In course of assessment proceedings, ld. Assessing Officer noted that assessee has claimed deduction of Rs.2,38,25,000/- which included weighted deduction of Rs.1,41,25,000/- u/s 35(1)(iii) and Rs.97,00,000/- u/s 35AC of the Act. Ld. Assessing Officer called for details and explanation in respect of the said deductions claimed by the assessee. Details of contributions/payment made by assessee in respect of aforesaid deductions are tabulated as under:- Name of Trust Address Donation made (Rs.) Deduction claimed u/s Amount of Deduction (Rs.) Kashba Youth P.O.-Egra, Dist. Purba Midnapore, West Bengal 1,30,00,000/- 35(1)(iii) 1,41,25,000/- Red Plus Society 22, Baghajatin station Road, Kolkata 30,00,000/- 35AC 30,00,000/- Gohaldiya Jati Upajati Blue Bird Women's Welfare Centr....
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....icion and surmises. According to the assessee, the presumption or suspicion, howsoever strong it may appear to be true has to be corroborated with evidence to prove that assessee had adjusted its profit in the form of bogus donations. According to assessee, statements relied upon by ld. Assessing Officer were just plain statements without any supporting material or evidence in support of such statements. Contrary to this, all the positive material filed by the assessee has been ignored. It was also strongly submitted that neither ld. Assessing Officer himself has examined neither these persons nor any opportunity to cross-examine has been given to assessee which has formed basis for the disallowance, violating the principles of natural justice. 4.1. In respect of credit for the advance tax paid of Rs.75,00,000/-, a lesser credit of Rs.10,00,000/- was given, which was contested by assessee before ld. CIT(A). In this respect, ld. CIT(A) directed ld. Assessing Officer to verify the claim of assessee from Form 26AS along with bank statement and allow credit for same, based on the said verification. 4.2. After considering the aforesaid submission of assessee, ld. CIT(A) did not fi....
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.... trust. f) Ld. Assessing Officer, according to the ld. Counsel, has simply relied on these statements which do not have any legs to stand in absence of any corroborative material. Ld. Counsel submitted that Shri Raj Kr. Mishra, is neither an employee nor Director of the assessee company and has no relation with the assessee. According to him, ld. Assessing Officer has made no effort to summon Shri Raj Kr. Mishra to who Shri Ambikesh Manna, has alleged that cash was given. According to ld. Counsel, all the observations and conclusions are thus based on suspicion and surmise. (ii) Red Plus Society (deduction of Rs.30,00,000/- u/s 35AC of the Act) - a) This society is registered under the West Bengal Societies Act, 1961, vide Registration No. 5/66458/1990-91, as a Trust. This trust has been granted Registration u/s 12A of the Act vide Registration No. DIT(E)S-161/8/E/335/200102/4403-05. b) This trust has been approved for eligible activities u/s 35AC of the Act vide gazette notification no. S.O. 406(E) dt. 09/03/2012. c) Assessee has made payments through proper banking channel for which this Society has issued receipts to the assessee. Soc....
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....conducting any independent enquiry to verify the authenticity of the transaction, from the evidence placed on record. 7. Per contra, ld. Sr. D/R, vehemently argued and submitted that, donations made by assessee are rightfully held as bogus since funds were transferred by the respective societies/trust to the companies which are shell companies as observed by the ld. Assessing Officer from the bank statement of the trusts/societies. Ld. Sr. D/R reiterated the observations made by the ld. Assessing Officer that these are accommodation entries for which the cash has been routed giving it a colour of donations eligible for deduction u/s 35(1)(iii) and 35AC of the Act. Ld. Sr. D/R also submitted that the statements recorded and referred to by ld. Assessing Officer clearly demonstrates the nature of transaction which have been rightly held by ld. Assessing Officer as bogus, leading to disallowance. 8. We have heard the rival contentions and perused the material on record. We take note of the fact that in support of the claim of deduction u/s 35(1)(iii) and 35AC of the Act, assessee has furnished all the relevant documents and details, stated above and forming part of the paper book....
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....atement at the Bar that in case of all the three trusts/societies, their registrations have not been cancelled by the Department. 9. We also note that ld. Assessing Officer has made some enquiries regarding the bank account of the assessee and that of the three trusts/societies from where he noted that donations made by assessee got transferred from the accounts of the three trusts/societies to certain companies which have been alleged to be shell companies. In this respect, we take note of the statement of the ld. Counsel that once assessee has made payments to these trusts/societies, it was neither authorized nor required to check the end use of the funds by these organizations that are independent in their own accord. Thus, if any irregularities have happened, those have happened at the end of the said trusts/societies and the assessee is in no way connected to the scheme of arrangement, if any, alleged to be bogus by the authorities below; more particularly, is absence of any positive material or evidence to prove that cash in lieu of the bank payments made by the assessee was given back either to the assessee or to any of its representatives. 10. From the facts emerging ....
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....It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of the....