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Judgment
PER KRINWANT SAHAY, AM :
The present appeal is filed by the Revenue against the order dt. 11.7.2025 of Ld. Commissioner of Income Tax (Appeals-)03, Noida for Assessment Year 2019-20.
Grounds of appeal raised by the Revenue are as under:
Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in restricting the disallowance of bogus donation u/s 80GGC to Rs. 6,00,000/- as against Rs. 8,00,000/- made by the Assessing Officer,without appreciating that the entire claim of Rs. 8,00,000/-was ineligible and part of the modus operandi of RUPPs as established during search proceedings.
Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the addition of Rs. 1,00,00,000/- made by the Assessing Officer u/s 69A r.w.s. 115BBE, without appreciating that the assessee had failed to establish the source and nexus of the time deposit with disclosed income and the burden of proof rested on the assessee.
Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has crred in deleting the addition of Rs. 13,01,200/- made by the Assessing Officer on account of unsubstantiated claims of gratuity, leave encashment, children education allowance etc., by relying on fresh documents filed at the appellate stage without granting the Assessing Officer an opportunity for verification.
Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in granting reliefs which are contrary to the evidences brought on record and without properly appreciating the findings of the Assessing Officer.
That the order of Ld. CIT(A)-3, Noida being erroneous in law and facts be set aside and order of the A.O. be restored.
That the above grounds are without prejudice to each other and appellant craves leave to add, alter or amend any ground or grounds on or before the date of hearing of appeal.
Appeal on ground No.1 is against restricting the disallowance of bogus donation u/s 80GGC to Rs. 6,00,000/- as against Rs. 8,00,000/- made by the Assessing Officer.
The Ld. DR argued against the findings given by the Ld. CIT(A),on this issue, which is as under: -
“5.2In this ground of appeal, the AR has contested the addition of Rs. 8 lacs made by the AO on account of alleged bogus donation u/s 80GGC. The AR has stated that the said donation was made through banking channel and assessee is eligible f or claim of deduction u/s 80GGC. The AR f urther stated th at the donation made by the assessee is only of Rs. 6 lacs and not Rs. 8 lacs as alleged by the AO. The appellant also f iled copy of the bank account statement wherein, donation of Rs. 6 lacs on 19.11.2019 is clearly ref lected. As f ar as, the issue of claim of bogus deductions by making donations to RUPPs is concerned, the complete modus operandi has been discussed by the Assessing Off icer in the assessment order. The AO has clearly pointed out the f act that the donations made via banking channel are routed through the accounts of RUPPs and layered through shell entities f rom wherein the cash is returned back to the donor. The said f indings of the AO are based on the search action carried out on the RUPPs wherein, the donation made by the assessee to one of the alleged RUPPs was also specif ied. Once, there is clear documentary evidence relatingto payment of bogus donation, the claim of the assessee u/s 80GGC cannot be justif ied. The contentions of the appellant that no evidence of return of cash is there is not material as it is not necessary that the evidences of cash transactions relating to Financial Year 2018-19 would be f ound during the course of search in FY 2022-23. The action of the AO in adding the same to the income of the assessee is justif ied but the addition should have been restricted to the actual amount of the alleged donation of Rs. 6 lacs debited to the bank account of the assessee. Hence, the addition made by the AO is restricted to Rs. 6 lacs and therefore, this ground of appeal is partly allowed.”
Per contra, the Ld. Counsel for the Assessee relied on the order of the Ld. CIT(A).
We have considered the findings given by the Assessing Officer in the assessment order in this case and findings and factualposition given by the Ld. CIT(A) in the appellate order. It has been clearly brought out by the Ld. CIT(A) that on the basis of papers and details filed by the Assessee, the total amount of donation made by the Assessee u/s 80GGC was Rs. 6 lacs only and not Rs. 8 lacs as alleged by the Assessing Officer as the total donation is only Rs. 6 lacs, therefore, the disallowance to make Rs. 8 lacs areneither logical nor legal. As such, keeping inview the facts mentioned above, we do not find any infirmity in the findings given by the Ld. CIT(A) on this issue. Accordingly, Revenue’s appeal on this issue is dismissed.
Appeal on ground No.2 is against the deletion of addition of Rs. 1 crore made bythe Assessing Officer u/s 69 A read with section 115BBE of the Act.
The Ld. CIT(A) has brought out a complete factualposition on this issue in the appellate order, which is as under:-
“5.3In these grounds of appeal, the AR has contested the addition of Rs. 1 crore made by the AO with respect to a time deposit made in her bank account. The AR submitted copy of the bank account statement wherein, vide entry dated 17.11.2018 a time deposit of Rs. 1 crore has been made. There are regular credits in the bank account of the assessee. It also needs to be pointed out here that the assessee has f iled a return of income of Rs. 5,46,84,197/- during the year under consideration. As per Form 16, f iled with the submissions, it is seen that the assessee has drawn a salary of Rs. 5,33,62,191/- f rom Dewan Housing Finance Corporation Limited. The time deposit of Rs. 1 crore has been created f rom the same bank account and the sources of the same arise f rom the credits in the said bank account. The submissions of the appellant on the above issue along with the evidences called f or during the appellate proceedings were f orwarded to the AO f or comments vide email dated 28.06.2025. Reminder was issued to the AO vide this off ice email dated 05.07.2025. No objections have been raised by the AO till the date of f inalization of appeal. Hence, the application by the AO of provisions of Section 69A to the time deposit of Rs. 1 crore is un warranted and said addition is liable to be deleted. Accordingly, this ground of appeal is allowed.”
The Ld. DR argued against the findings given by the Ld. CIT(A) on this issue, whereas, the Ld. AR relied on the findings given by the Ld. CIT(A).
We have considered the findings given by the AO and the arguments of the Ld. DR. We have also considered the findings given by the Ld. CIT(A) on this issue and the ld. Counsel for the Assessee. We find that the Assessee’s husband is a salaried employee drawing salary from Deewan Housing FinanceSorption to the tune of Rs. 5,33,62,191/-The Assessee has filed a return of income of Rs. 5,46,84, 197/-. In our considered view if the Assessee has income of more than Rs. 5.46 crores in the year under consideration, then there is nothing unusual of making aterm deposit of Rs. 1 Crore out of income of Rs. 5.46 Crores for the year under consideration. The Revenue has brought nothing on record to rebut the findings given by the Ld. CIT(A) on this issue, therefore, we find no reason to interfere in the findings given by the Ld. CIT(A). The Revenue’s appeal on this issue is dismissed.
Appeal on ground No.3 is against the deletion of addition of Rs. 13,01,200/- made by the Assessing Officer on account of unsubstantiated claim of gratuity, leave encashment, children education allowance etc.
The ld. DR argued that the findings given by the Ld. CIT(A) on this issue are not correct.
On the other hand, the Ld. AR of the Assessee has relied on the order passed by the Ld. CIT(A) on this issue. The findings given by the Ld. CIT(A) on this issue are as under: -
“5.4In these grounds of appeal, the AR has contested the addition of Rs. 13,61,200/- made by the AO on account of disallowance of claim of exempt gratuity, exempt leave encashment, exempt leave travel allowance and exempt children education allowance. The AR during the course of appellate proceedings submitted that the above allowances are exempt u/s 10(10), 10(10ΛΑ), 10(5) and 10(14) of the Act respectively. The AR f urther stated that these amounts are duly mentioned in Part-B of Form No. 16. The AR submitted that the appellant had received gratuity and leave encashment on termination of employment f or which, the Loner of Copy of resignation acceptance letter was f iled with the submissions. As per AR, gratuity to the extent of Rs. 10 lacs and leave encashment to the extent of 3 lac is exempt as per provisions of law….”
We have considered the findings given by the Assessing Officer in the assessment order and the Ld. CIT(A) in the appellate order on this issue. We have also considered the arguments made by the ld. DR and ld. Counsel for the Assessee. We find that the Ld. CIT(A) has clear findings and passed a very speaking order on this issue which in our opinion needs no interference. Daring’s the proceedings before us, the Revenue could not rebut the findings given by the Ld. CIT(A) on this issue. Therefore, we are inclined to dismiss the appeal of the Revenue on this issue also.
In the result, appeal of the Revenue is dismissed.