Parag Dave Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that deduction u/s. 35(1)(ii) of the Income Tax Act rightly disallowed since donation was given to Arvindo Institute of Applied Scientific Research Trust whose approval expired on 31.03.2006. Accordingly, appeal of assessee dismissed.
Facts- The assessee is engaged in the business of soil testing, building material testing and land survey work as well as non-constructive testing work. During scrutiny assessment, AO observed that in the statement of total income and annexure of column no. 19 in the Form no. 3CD filed by the assessee, the assessee claimed deduction u/s. 35(1)(ii) of Rs. 26,25,000/- being 175% of Rs. 15,00,000/- for donation given to Shri Arvindo Institute of Applied Scientific Research Trust which is not an approved entity u/s. 35(1)(ii)(iii).
AO after considering the reply of the assessee held that the said trust is involved in money laundering through bogus donation payment in cash and therefore the claim made by the assessee is not genuine claim u/s. 35(1)(ii) of the Income tax Act and thus disallowed Rs. 26,50,000/- being 175% donation of Rs. 15,00,000/-. CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that the said Arvindo Institute of Applied Scientific Research Trust was earlier approved under Section 35(1)(ii) of the Act which expired on 31.03.2006 and, thereafter, this entity being not recognised for purpose of Section 35(1)(ii) of the Act, is not eligible to raise donations for undertaking Scientific Research. The assessee, at no point of time, can state that he was not aware about this position as the assessee is a Science Graduate conversant with financial updates and is very well aware about the business and the approval of the CBDT for this particular Institute up till 2006. The Assessing Officer as well as the CIT(A) has rightly disallowed the deduction.
