#Bogus Donations

The ITAT Ahmedabad has ruled that donations to political parties accompanied by cash-back arrangements constitute accommodation entries with no genuine economic substance, rendering them ineligible for tax deduction under Section 80GGC. This sets a critical precedent for the Income Tax Department to scrutinize politically linked donations and crack down on shell transactions disguised as electoral funding.

ITAT Mumbai disallowed a Rs. 9.9 lakh deduction under Section 80GGC, ruling that donations to a registered but unrecognized political party involved in a nationwide scam are invalid, even with documentary proof. The decision underscores that tax benefits under Section 80GGC are contingent on genuine political contributions, not merely formal compliance.