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2023 (11) TMI 862 - ITAT SURATDisallowance u/s 14A r.w.r. 8D - assessee has not shown suo moto disallowance for earning exempt income - HELD THAT:- As assessee has given complete details of expenses incurred by assessee for earning taxable income. The total turnover of the assessee for the year under consideration is Rs. 127.39 crore and total administrative expenses is Rs. 79.58 lakhs only. Surprisingly, the AO determined the disallowance u/s 14A of Rs. 2.70 crore, which is not in consonance with the proviso attached with Rule 8D(2). The disallowance of section 14A cannot swallow the entire expenses administrative or otherwise which were incurred for earning taxable income. AR in his submission categorically contended that total administrative expenses claimed by the assessee apart from disallowance related to exempt income is only 0.62% of their total turnover. Assessee while referring such administrative expenses submitted that the director’s remunerations claimed during the year is only Rs. 18.00 lakhs and some percentage of directors’ remuneration/salary may be disallowed. We find merit in such submission of ld. AR of the assessee, therefore, we direct that apart from suo moto disallowance being 1.00 % of dividend income, direct expenses and 25% of director’s remuneration would be sufficient to meet the end of justice, so far is disallowance under Rule 8D is concern. AO is directed accordingly. In view of the aforesaid factual and legal discussion, the ground no.1 and 2 of appeal are partly allowed. Disallowance u/s 80G for the want of registration certificate - HELD THAT:- Before ld. CIT(A), the assessee filed copy of receipt of donations as well as receipt of donation to both the trusts containing registration under section 80G along with their PAN. We find that copy of certificate under section 80G of both the trusts is placed on record along with the copy of receipt to both the trusts. We further find that the assessee claimed 50% deduction of donation to such trusts. CIT(A) on his satisfaction granted deduction under section 80G on verification of facts. In our view, the order of ld. CIT(A) is based on verification of facts, which does not require interference at out end. Decided against revenue.
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