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2024 (1) TMI 1031 - AT - Income TaxEstimation of income - bogus purchases - HELD THAT:- Since the issue is exactly similar and grounds as well as the facts are also identical, respectfully following the above decision in assessee’s own case for the A.Y. 2014-15 & 2015-16 [2023 (5) TMI 358 - ITAT MUMBAI] we direct the AO to restrict the addition to 2% of the alleged bogus purchases for the year under consideration. Disallowance of deduction u/s 80G - CSR expense was disallowed u/s 37 and deduction was claimed under Chapter VI-A of the Act being 50% of eligible amount - HELD THAT:- We find that CIT(A) considered this aspect of the matter elaborately with reference to the submissions of the assessee and the averments in the Assessment Order and deleted the disallowance of deduction under section 80G - While deleting the disallowance CIT(A) has followed the decisions of Allegis Services (India) (P.) Ltd. [2020 (5) TMI 378 - ITAT BANGALORE] and the decision of Seafoods Pvt Ltd., v. CIT [2021 (11) TMI 1168 - ITAT MUMBAI] Various courts have held that donation on account of CSR Expenditure made to institutions registered under section 80G are eligible for deduction u/s 80G - Accordingly, we do not find any infirmity in the order of the Ld. CIT(A) in deleting the disallowance of deduction u/s 80G. Accordingly, ground raised by the revenue is dismissed. Disallowance of mark to market losses - Nature of loss - allowable business loss or not? - HELD THAT:- We observe from the record that identical issue is decided in assessee’s own case for the A.Y. 2011-12 has decided the issue in favour of assessee observing assessee has regular export business and in order to mitigate the forex exposure, it has booked the forward contract. At the end of the year, assessee has accounted for mark to market loss and profit in the pending forward contracts. In this year, assessee has incurred net loss. It is also observed that in the subsequent Assessment Years the assessee has accounted the net profit and the same was accepted by the revenue and charged to tax. The assessee is consistently following the method of accounting. Therefore, the net loss accounted by the assessee is supported by the export business carried on by the assessee. Therefore, in our view the loss claimed by the assessee is for the purpose of business and allowable business loss - Decided against revenue. Disallowance u/s 14A r.w.r. 8D - AO held that the administration activities carried by the assessee are towards making investments and assessee was asked why the above Rule 8D should not be considered - Assessee submitted that assessee has not earned any income and has not incurred any expenses and also not made any disallowance of expenditure relating to exempt income - HELD THAT:- AO asked the assessee why the assessee has not made any disallowance u/s 14A of the Act. In response assessee has clearly responded that it is not warranted. Considering all we do not see any reason to accept the submissions of the Ld.AR of the assessee that there is no satisfaction recorded in this case, as per the observations of the AO, the provisions of section 14A are applicable. Therefore, we reject the submissions made by the assessee. We observe that AO has disallowed adopting Rule 8D(2)(ii) of I.T. Rules and applied 1% of the average value of investments and we are not sure whether he has considered only those investments which has actually earned the exempt income. Accordingly, we direct the AO to consider only those investments which are actually earned exempt income. Accordingly, we direct the AO to disallow the expenses under section 14A as per our above said directions. Accordingly, this ground is allowed for statistical purpose.
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