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| The Tax Publishers2020 TaxPub(DT) 0239 (Mum-Trib) INCOME TAX ACT, 1961
Section 35(1)(ii)
When AO investigated, said 'S' he confirmed that M/s. Herbicure was in receipt of donation and it had not given any refund in cash, thus sole basis of disallowance of claim, i.e., statement of ones recorded on oath during in case of HHCBHRF as a matter of fact disappeared and hence, assessee was fully entitled to claim the deduction under section 35(1)(ii).
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Business deduction under section 35(1)(ii) - Donation given to Herbicure Health Care Bio Herbal Research Centre - Denial on the basis of statement recorded during search in case of donee -
Assessee claimed deduction under section 35(1)(ii) as regards donation given to Herbicure Health Care Bio Herbal Research Centre (HHCBHRF). AO denied assessee's claim on the ground that search and seizure action was conducted on said entity and report received from investigation wing in Kolkata brought out modus operandi of the trust taking donations and returning the amount in cash. Held: Sole basis for making disallownce was statement of ones recorded on oath during in case of HHCBHRF other than said statement there was no other evidence to show that assessee has received back donations suggested in his general statement about providing accommodation entry by said 'S'. Also, 'S' had nowhere stated that assessee indulged in bogus donation or that amount donated was given back to assessee after deducting the commission. When AO investigated, said 'S' he confirmed that M/s. Herbicure was in receipt of donation and it had not given any refund in cash, thus sole basis of disallowance of claim as a matter of fact disappeared and hence, assessee was fully entitled to claim the deduction under section 35(1)(ii).
REFERRED : Dy. CIT v. Desmet Reagent Pvt. Ltd. ITA No. 15/Kol/2017 dated 10-10-2018 : 2018 TaxPub(DT) 6746 (Kol-Trib).
FAVOUR : In assessee's favour.
A.Y. : 2014-15
IN THE ITAT, MUMBAI BENCH
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