2023 (7) TMI 1256 - AT - Income Tax

Addition of income appearing in Form No. 26AS not found at ITBA portal - For financial for next year F.Y. 2017-18 wherein such receipts are shown/declared by the appellant - AO added lumpsum disallowance of 20% out of expenses so claimed - HELD THAT - The appellant filed the documentary evidence/proof of said receipts duly shown in the F.Y. 2017-18 highlighting the relevant entries vide annexure 3 of the reply dated 07-11-2022. However the Ld. CIT(A) without providing any opportunity passed the order by simply mentioned that above said details were not found on ITBA portal though assessee AOP mentioned in its letter. It is, thus evident that said income of stall rent was income of financial year 2017-18 (A.Y. 2018-19) and has been duly shown in return filed for A.Y. 2018-19 and, therefore its addition wrongly confirmed by Ld. CIT(A) in A.Y. 2017-18 is a double addition which is wrong and bad in law and the same deserves to be deleted. Deduction u/s 80G - Donation given to CM Relief Fund - Deduction denied as proof of such donation was not found at the ITBA portal - HELD THAT - A.O. did not required assessee in assessment proceedings to produce receipt of contribution made by Association in C.M. Relief Fund for which deduction u/s 80G was claimed in return filed. The said receipt is filed at page no. 22 of annexure 3 uploaded on ITBA portal on 07-11-2022. The said receipt is again enclosed herewith. It is therefore prayed that deduction u/s 80G may kindly be allowed. Addition made based on 26AS - As based on the arguments of both the parties that the contentions raised before us found acceptable. The deduction of donation is required to be given as the ld. AO has not asked and the ld. CIT(A) has not given any adverse finding we direct the assessee to file the proof of donation made to the file of the ld. AO. The ld. AO is directed to verify the receipt of the donation and allow the claim of the assessee in accordance with the law. As regards the addition based on the receipt reported in the year under consideration the ld. AO is directed to verify that whether the same is recorded in the receipt shown by the assessee in the subsequent year and after verification the receipt which has been shown in the accounts of the subsequent year then the ld. AO is directed to deleted the amount which has already been offered in the subsequent year.

Summary

Issues Involved:
1. Addition of Rs. 19,02,500/- to the income based on Form No. 26AS.
2. Disallowance of deduction of Rs. 5,00,000/- under Section 80G of the IT Act, 1961 for donation to the CM Relief Fund.

Detailed Analysis:

Issue 1: Addition of Rs. 19,02,500/- to the Income Based on Form No. 26AS

The appellant, an association of persons (AOP) representing builders and promoters, organized an EXPO on 21.04.2016. Some participants booked stalls in March 2017 and made payments, which appeared in Form 26AS for the financial year 2016-17. However, the appellant claimed that this income was actually offered to tax in the subsequent financial year 2017-18, following the matching concept as per accounting standards. The appellant provided financial statements for FY 2017-18 to support this claim, but the CIT(A) noted that these documents were not found on the ITBA portal, making verification impossible. Consequently, the CIT(A) upheld the addition of Rs. 19,02,500/- made by the AO.

Issue 2: Disallowance of Deduction of Rs. 5,00,000/- Under Section 80G

The appellant claimed a deduction of Rs. 5,00,000/- under Section 80G for a donation to the CM Relief Fund. The AO disallowed this deduction due to the non-production of the donation receipt on the ITBA portal. During the appellate proceedings, the appellant asserted that the receipt was indeed uploaded, but the CIT(A) found no such attachment and sustained the AO's disallowance.

Tribunal's Observations and Directions:

The Tribunal noted that the CIT(A) did not provide an adequate opportunity for the appellant to present the necessary documents. The Tribunal directed the AO to verify the appellant's claims regarding the income of Rs. 19,02,500/- being offered in the subsequent year. If verified, the AO should delete the addition for the year under consideration.

Regarding the donation to the CM Relief Fund, the Tribunal instructed the appellant to submit the proof of donation to the AO. The AO is then directed to verify the receipt and allow the deduction under Section 80G if the claim is found to be valid.

Conclusion:

The Tribunal allowed the appeal for statistical purposes, directing the AO to verify the appellant's claims regarding both the addition of Rs. 19,02,500/- and the deduction of Rs. 5,00,000/-. The appellant is required to submit the necessary documents within 30 days, and the AO is to provide the consequent relief after verification.