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2018 (1) TMI 1649 - AT - Income TaxDisallowance on account of loss on foreign exchange fluctuation - nature of loss suffered - HELD THAT:- As relying on assessee's own case for assessment year 2008-09 present situation is that the revenue authorities have not examined the nature of loss suffered by the assessee and how a provision was made. Whether, it was a foreign derivative transaction or transaction in respect of forward exchange contract pertaining to hedge the loss in respect of carbon credit has not been clearly emerged from the facts of the case. We, therefore, deem it proper to restore this issue to the file of the AO so that he can make necessary enquiry and if it was a foreign exchange loss connected to the carbon credit then naturally the same should not be allowed - thus we restore this issue to the file of the Assessing Officer with the same direction as above. Hence, this ground of revenue is allowed for statistical purposes. Deduction under section 80IA Computation - depreciation on common assets - 40% depreciation on common fixed assets be not reduced from eligible profit claimed u/s. 80IA of the Act - HELD THAT:- We find that similar addition was made by the Assessing officer in the assessment year 2008-09 and the CIT(A) has confirmed the same. On appeal by the assessee, the assessee did not press this ground before the Tribunal. Therefore, this addition was sustained. Since the facts of the present year is similar to that in the year 2008-09, we reverse the order of the CIT(A) and restore that of the Assessing officer. Hence, this ground of revenue is allowed. Disallowance u/s 14A - Assessee’s counsel is making a plea that investments made by the assessee company in the present case were strategic investments - HELD THAT:- We set aside the order of the CIT(A) and remit the matter back to the file of the Assessing Officer, who shall examine the pattern of holdings in the group companies and decide the issue accordingly. This ground of the revenue is allowed for statistical purposes. Deduction under the head “pooja & festival expenses” under the head Charity & Donation expenses - AO observed that these expenses are not relatable to business purposes of the assessee thus disallowed - HELD THAT:- We find that the CIT(A) after considering the CBDT circulars held that the expenses under the head charity, donation do not relates to business of the assessee whereas he has allowed deduction for the pooja and festivals. We see no reason to interfere with the order of the CIT(A), which is hereby confirmed. Disallowance of share capital expenses - HELD THAT:- Assessee is listed with BSE, NSE and SEBI, and the expenses relate to annual custodian fees, listing fees, compliance certificate fees, printing of annual reports, charges publication of quarterly, half-yearly and annual results as per the requirements of SEBI and other misc professional fees relating to the work, which are recurring in nature. CIT(A) has deleted the addition after properly appreciating the facts of the case. Hence, we confirm his order and reject the ground of appeal of the revenue. Disallowance on account of Social Welfare expenses which have not been incurred wholly and exclusively for the purpose of business - CIT-A allowed the deduction - HELD THAT:- CIT(A) has referred to the amendment made in Finance Act (No.2) 2014 w.e.f. 1.4.2015 in Section 37, wherein, it is declared that for the purposes of sub-section(1) any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession. CIT(A) has held that there was no such embargo for the preceding years - CIT(A) held that the disallowance cannot be sustained. In the instant case, it is submitted that CSR expenses are incurred for the welfare of local community and thereby improve corporate image of the companies incurring such expenditure. We are of the considered opinion that the CIT(A) has rightly considered the decision and deleted the addition made. Disallowance u/s.40A(3) - CIT-A has allowed the deduction which are below the prescribed limit u/s.40A(3) - HELD THAT:- Before us, no plausible explanation was submitted by the ld D.R. to controvert the above findings of the CIT(A). Hence, we uphold the order of the CIT(A) and dismiss the ground of appeal of the revenue.
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