#Section 80GGC

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 Delhi ruled that donations to political parties engaged in accommodation entries do not qualify for tax deduction under Section 80GGC of the Income Tax Act. The tribunal upheld the disallowance of Rs. 3 lakhs claimed by the assessee, emphasizing that genuine political contributions must be free from fraudulent financial practices. This sets a precedent for scrutinizing political donations linked to money laundering schemes.

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.