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2022 (9) TMI 152 - AT - Income TaxDisallowance u/s 36 (1) (iii) - interest expenditure - as submitted the assessee is following the percentage completion method, the above interest should form part of work in progress and as soon as part of revenue is offered for taxation assessee is entitled to claim the same in that proportion deduction of the same - HELD THAT:- As decided in assessee own case for assessment year 2014 –15 [2020 (4) TMI 842 - ITAT MUMBAI] we confirm the order of the learned CIT – A in deleting the disallowance of ₹ 2,241,160,000/–. Accordingly, ground number 1 and 2 of the appeal of the AO is dismissed. Disallowance of expenses u/s 14 A of the act invoking the provisions of rule 8D - HELD THAT:- Undisputed fact shows that there is no exempt income and during the year by the assessee. If there is no exempt, income naturally there cannot be any disallowance u/s 14 A of the act because no expenditure has been incurred on any exempt income during the year. Further the reliance placed by the learned departmental representative on the amendment made by the finance act 2022 applies prospectively as held in PCIT versus Era infrastructure private limited [2022 (7) TMI 1093 - DELHI HIGH COURT. In view of this we do not find any infirmity in the order of the learned CIT – A in deleting the disallowance u/s 14 A of the act. Accordingly, ground number 3 of the appeal of the learned AO is dismissed. Nature of expenditure - expenses towards software - revenue or capital expenditure - AO held it to be a capital expenditure - alternative plea of the assessee was adjudicated and depreciation was allowed at the rate of 60% - HELD THAT:- The assessee has incurred ERP expenditure and license fees for the software. Case of Raychem RPG Ltd [2011 (7) TMI 953 - BOMBAY HIGH COURT] covers the issue as decided this issue also in favour of the assessee and hold that this expenditure is revenue expenditure - Decided in favour of assessee. Claim of the assessee u/s 80GGB - assessee has given a donation to three different parties - HELD THAT:- Assessee has produced all the receipts except in case of ₹ 6,534,000 paid to Bharatiya Janta party. The transaction is demonstrated through the bank account of the assessee. In any way, the donation paid in cash is as such not allowable under that Section. The provision of Section 80GGB also speaks about the contribution is defined in Section 293A of the companies act 1956. As assessee has shown that the amount is of contribution paid by account payee cheque, merely because receipt is not available it cannot be denied. Therefore, we set-aside this issue to the file of the learned assessing officer to examine the claim of the assessee with respect to ₹ 6,534,000/– contribution made the political party by the assessee by examination of the bank account of assessee and assessee is directed to prove that same is contribution in terms of provisions of Section 293A of the companies act. Accordingly, ground number 2 of the appeal is set-aside to the file of the learned assessing officer to decide it afresh.
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