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2021 (8) TMI 627 - AT - Income TaxDisallowance of Corporate Social Responsibility (CSR) expenditure - revenue or capital expenditure - claim of the assessee is that the ld. CIT (Appeals) then should have directed the ld. Assessing Officer to grant depreciation on these assets - HELD THAT:- Assessee has paid premium of land for this facility. The building is constructed of prefabricated steel structure and cannot be held to be a temporary structure. Therefore, this expenditure cannot be allowed to the assessee as Revenue expenditure under Section 37(1) of the Act. Naturally these expenditure are capital in nature and also involve substantial payment for the land premium - there are certain expenditure for the construction of the training institute with pre-fabricated steel at Ghitorni, New Delhi. To claim the depreciation on this the assessee should have submitted the details of the actual cost of the asset, ownership of the asset and actual use of the asset. No such details are provided before us. In view of this, we send the issue back to the file of the ld. Assessing Officer directing the AO to examine the claim of the assessee for depreciation on this asset to the extent of cost of building. Assessee is directed to submit the relevant details before the Assessing Officer. With respect to the up-gradation of complex in Agartala and school construction in Rajkot, we find that both these expenditure are not for the purposes of business and, therefore, neither they can be allowed under Section 37(1) of the Act nor any depreciation can be allowed on these assets as they are not used for the purpose of the business of the assessee. Accordingly, ground No. 5 of the appeal of the assessee is partly allowed with above direction. Disallowance u/s 14A r.w.r.8D - assessee has claimed exemption of dividend income - assessee has disallowed suo moto a sum - HELD THAT:- We find that assessee has investment in joint ventures and liquid funds amounting to in all to ₹ 22,359 lakhs. From the joint ventures no exempt income is received during the year. Total dividend is from liquid funds. The assessee has share capital and pre-reserve to the extent of ₹ 79,550 lakhs which is higher than the amount of investment and, therefore, no disallowance under Section 14A read with Rule 8D(2)(i) and (ii) can be made. Further for working out disallowance under 8D(2)(iii) clearly the average of investment with exempt income should be taken. Such is the mandate of Hon'ble Delhi High Court in the case of ACB India Ltd.[2015 (4) TMI 224 - DELHI HIGH COURT] - Based on this the disallowance comes to ₹ 68.68 lakhs, which is the suo moto disallowance made by the assessee - Decided against revenue. Disallowance u/s.40(a)(ia) - non-deduction of TDS on 'Bank Guarantee Expenses' - Applicability of Notification No. 56/2012 of the CBDT in this regard issued vide F. No. 275/53/2012-IT (B)/SO 3069(E) dated 31.12.2012 - HELD THAT:- We find that the issue is squarely covered in favour of the assessee in assessee's own case for assessment year 2011-12 [2018 (5) TMI 2081 - ITAT DELHI]held that the Notification issued by the CBDT was to remove the rigorous of TDS and for unnecessary hardship. Therefore, it was held that the Notification issued also applies to assessment year 2011-12 though it is stated to be applicable with effect from 1.01.2013. There is no change in the facts and circumstances of the case. Therefore, respectfully following the decision of the co-ordinate bench in assessee's own case, we confirm the order of the ld. CIT (Appeals). Ground No. 4 of the appeal of the ld. Assessing Officer is dismissed. Allowance of Corporate Social Responsibility expenditure incurred by the assessee on awareness campaign ignoring the content of Explanation (2) of Section 37(1) - CIT (Appeals) has allowed this expenditure holding that these are the advertisement expenditure and assessee was the sponsor displaying its logo HELD THAT:- We do not find any infirmity in holding that the above expenditure is an advertisement expenditure incurred by the assessee. With respect to the applicability of Explanation (2) to Section 37(1) of the Act, same applies with effect from 1.04.2015 i.e. assessment year 2015-16 and not to this year. In view of this, ground No. 5 of the appeal of the ld. Assessing Officer is dismissed.
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