Assessee’s Failure to Reconcile the Discrepancy Justifies Addition: ITAT upholds Donation Disallowance [Read Order]
The Tribunal based its decision on the records already available in the assessment proceedings.
Donation-disallowance-Taxscan
Donation-disallowance-Taxscan
The bench of the Income Tax Appellate Tribunal (ITAT), Raipur, upheld the disallowance of ₹15,000 made on account of donation expenses, as the assessee had failed to reconcile the difference between the amount debited in the Profit and Loss Account and the amount offered to tax, thereby justifying the addition made by the Assessing Officer (AO) under the Income Tax Act, 1961.
The appellant, Subramaniam Swaminathan Iyer, had filed his return of income for Assessment Year 2012-13 declaring total income of ₹2,23,52,780 and agricultural income of ₹2,00,000. During the scrutiny assessment conducted under Section 143(3) of the Income Tax Act, 1961, the AO noted that the appellant had debited ₹72,157 as donation expenditure in the Profit and Loss Account.
However, while computing total income, the appellant had offered only ₹57,157 for taxation, leaving a shortfall of ₹15,000. The AO therefore disallowed the difference and added ₹15,000 to the total income, which was upheld by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A)].
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Represented by Milind Bhusari, the appellant argued that the difference was unintentional and arose from a clerical mistake while preparing the computation of income. It was contended that the entire donation amount had been duly disclosed in the books of accounts, and the shortfall did not represent any concealment or suppression.
Represented by S. L. Anuragi, the Revenue submitted that the assessee had failed to reconcile the difference between the claimed and offered donWation amounts despite multiple opportunities. Accordingly , the disallowance made by the AO was fully justified under the provisions of the Income Tax Act, 1961.
The Bench comprising of Judicial Member, Ravish Sood and Accountant Member, Arun Khodpia observed that the assessee had not provided any explanation or supporting evidence to justify the difference of ₹15,000 between the donation expense claimed in the accounts and the amount offered to tax.
Therefore, the Tribunal upheld the addition made by the AO.
Accordingly, the Tribunal confirmed the disallowance of ₹15,000.
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