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2017 (7) TMI 1047 - AT - Income TaxDisallowance made under section 35(1)(ii) - Held 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 ₹.15 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. However, the Department has not made any effect 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. Under the above facts and circumstances, the Assessing Officer 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 under section 14A - Held that:- Assessing Officer has observed that the assessee had shown an amount of ₹.20,36,486/- on dividend received from shares and mutual funds and claimed exemption under section 10(38) of the Act. The Assessing Officer disallowed a sum of ₹.58,888/- being the expenses incurred towards earning the exempt income. In the assessment order, the Assessing Officer has not given any basis and details of disallowance made under section 14A of the Act, such as total investment made by the assessee, application of relevant provisions of Income Tax Rules, etc. Under the above facts and circumstances, we direct the Assessing Officer to pass a speaking order with regard to the disallowance under section 14A of the Act. Thus, the ground raised by the assessee is allowed for statistical purposes.
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