Brightech Valves & Controls Pvt. Ltd. Vs DCIT (ITAT Ahmedabad)
Donation to unrecognised research institute not eligible for deduction u/s. 35(1)(ii): ITAT Ahmedabad
Donation to Unrecognized Research Institute Ineligible for Deduction u/s 35(1)(ii): ITAT Ahmedabad
ITAT Ahmedabad held that donation to, Shri Arvindo Institute of applied scientific research, which is not recognised research institute is not eligible for deduction under section 35(1)(ii) of the Income Tax Act. Accordingly, deduction disallowed and appeal dismissed.
Facts- Assessee-company is engaged in the business of manufacturing Industrial Valves. Appellant-Assessee had paid an amount of Rs.5,00,000/-to M/s Arvind Institute of Applied Scientific Research Trust during the year under consideration. AO reopened the case of the assessee noting that M/s. Arvind Institute of Applied Scientific Research Trust is not recognised research institute. AO disallowed the claim of deduction u/s. 35(1)(ii). AO also made addition of Rs. 8,730/- towards undisclosed TDS and Rs. 10,16,499/- on account of unexplained sales promotion and sale commission expenses.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Co-ordinate Bench of the ITAT, Ahmedabad in the case of Joshi Technologies International Inc Vs. CIT has held that a very important fact which emerges is that the Institute, to which donation was made by the assessee during the impugned year and weighted deduction claimed thereon u/s.35(1)(ii) of the Act, was not approved for the said purposes for the impugned year. The fact on record available with the Ld. CIT is that the approval granted to the said Institute expired on 31/03/2006. Impugned year before us is A.Y 2015-16. The Advisory issued by the CBDT in December-2018 brought this fact to the notice of all its Field Officers. Therefore, the fact on record was that the said Institute was not approved for receiving donations u/s.35(1)(ii) of the Act during the impugned year. Even if the assessee and the AO had bonafidely claimed and allowed respectively the deduction based on documents furnished by the said Institute, the fact still remains that the claim was not allowable as per law. What is material for claiming deduction is its eligibility as per law and not the intention with which it is claimed, whether bonafidely or malafidely. Even a bonafidely claimed deduction if found ineligible in law, it cannot be allowed to the assessee.
