Manoj Kumar Jagetia Vs ITO (ITAT Jodhpur)
A 5% Commission Formula Is Not Evidence—Political Donation Allowed u/s 80GGC & Imaginary Cash-Back Addition u/s 69A Deleted
The Donation That Triggered Reassessment
The Assessee, an employee of Balkrishna Industries Ltd., filed his original return for AY 2019-20 on 19.08.2019 declaring total income of ₹17,26,020. He claimed deduction of ₹3 lakh u/s 80GGC for a contribution made to Rashtriya Samajwadi Party (Secular).
A search u/s 132 was subsequently conducted on 07.09.2022 against a group of registered unrecognised political parties, intermediary entities and alleged exit providers in Ahmedabad. According to the AO, the seized material included donation receipts, diaries, loose papers & WhatsApp chats, while statements of certain office-bearers were recorded u/s 132(4). The Department alleged that donations received through banking channels were routed through intermediaries and returned to donors in cash after deduction of commission ranging from 3.5% to 5%.
On the basis of this information, proceedings u/s 148A were initiated and notice u/s 148 was issued on 10.04.2023.
Bank Payment In, Alleged Cash Payment Out
The Assessee reiterated the same income in the return filed pursuant to reopening. During reassessment, he furnished his computation, Form 16, bank statements, donation receipt and bank entry evidencing payment to the political party. He denied receiving any cash in return and requested the AO to furnish the material allegedly proving such repayment. He also sought the statements relied upon and an opportunity to cross-examine the concerned third parties.
