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2017 (4) TMI 1495 - AT - Income TaxDisallowance u/s 35(1)(ii) - AO denied the claim of the assessee on the ground that the above approval of the Central Government has been withdrawn retrospectively vide S.O. 2882(E) dated 06.09.2016 and the ld. CIT(A) confirmed the same - HELD THAT:- The Institution was enjoying the approval of the prescribed authority at that time and the assessee made donation was also not under dispute, the disallowance made by the Assessing Officer cannot be sustained under law. Our observation is duly fortified by the decision in the case of Seksaria Biswan Sugar Factory [1990 (3) TMI 47 - BOMBAY HIGH COURT]. The purport of the decision of Hon’ble Bombay High Court was that when the institution was enjoying the approval within the meaning of section 35(1)(ii) of the Act as on the date of receipt of donation and retrospective cancellation of approval of the concerned institution, the deduction claimed in respect of donation cannot be denied. Under the above facts and circumstances, denial of exemption claimed in respect of donation cannot be sustained. With regard to the donation, M/s. Herbicure confirmed the voluntary donation of ₹.1 lakhs from the assessee. A copy of the trust’s Corporation Bank statement in which the donation received was also sent by the trust. Based on the sworn statement of the Founder Director Shri Swapan Ranjan Das Gupta of M/s. Herbicure, wherein, he has admitted that his organization accept the donation and giving back of the same to the donor after deducting a commission @ 5% on the donation amount - Department has not made any effort to get any valid evidence that the organization has given back the donation to the donor after deducting a commission @ 5% on the donation amount. AO is directed to ascertain the means as well as actual amount repaid by the donee to the assessee and decide the issue afresh after giving sufficient opportunities of hearing to the assessee. Thus, the ground raised by the assessee is partly allowed for statistical purposes. Disallowance made u/s 14A - AO has made the disallowance over and above the dividend income earned by the assessee - HELD THAT:- As relying on M/S. CHETTINAD LOGISTICS PVT. LTD. [2017 (4) TMI 298 - MADRAS HIGH COURT] appropriate to remit the issue to the file of Assessing Officer to consider the disallowance under section 14A r.w. Rules 8D to find out whether interest bearings borrowed funds were used for making investments in shares and mutual funds. With this observation, we restore the issue to the file of Assessing Officer for fresh consideration.
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