Mihir Bipinbhai Parekh Vs DCIT (ITAT Mumbai)
Summary: The Tribunal dismissed the assessee’s appeal and upheld the disallowance of deduction under Section 80GGC for a donation of ₹25 lakh made to a registered unrecognized political party, holding the donation to be non-genuine. The Revenue relied on investigation reports and search findings showing that the political party was allegedly involved in routing bogus donations through intermediaries and returning funds to donors in cash or through banking channels. Although the assessee argued that the donation was made through banking channels and supported by receipts, the Tribunal found several surrounding circumstances suspicious. It noted the absence of any connection between the assessee’s chemical trading business and the political party allegedly working for agriculturists, the lack of evidence of the party’s activities in Maharashtra, and the unusually high donation amount constituting nearly 40% of the assessee’s annual profits. The Tribunal held that these facts failed to inspire confidence regarding the genuineness of the donation claim.
Core Issue. The issue before the Tribunal was whether the assessee was entitled to deduction under section 80GGC in respect of a donation of ₹25 lakh made to Kisan Party of India, and whether the claim could be denied on the ground that the donation was not genuine despite payment through banking channels and issuance of donation receipts.
