TMI Blog2017 (3) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... tion given by the Company to the Political Parties. The order of ld. CIT(A) is based on correct appreciation of the provisions and we do not find any infirmity or illegality for our interference. - Decided against revenue - ITA No.5432/Mum/2014 - - - Dated:- 8-2-2017 - SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Appellant : Sh. B.S. Bist -DR For The Respondent : Sh. Dinesh Vyas Advocate.) Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JM: 1. This appeal by Revenue u/s 253 of the Income-tax Act ( Act ) is directed against the order of Ld. Commissioner of Income-tax (Appeals) [for short the CIT(A)] -6 Mumbai dated 13.05.2014 for Assessment Year (AY) 2005-06. 2. Brief facts of the case are that the assessee-company is engaged in the business of manufacturing of Iron and Steel products, filed its return of income for relevant AY on 31.10.2005 declaring income of ₹ 5029,51,33,975/-. The assessment was completed u/s 143(3) of the Act on 26.12.2018 assessing the income at ₹ 5085,26,54,120/-. In the return of income, the assessee claimed the deduction u/s 80GGB of ₹ 3.5 Crore representi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s failure on the part of assessee to disclose fully and truly all material facts. The re-opening was done beyond the four years from the end of relevant AY in absence of any new or additional material before the AO. The AO was not justified in disallowing the claim u/s 80GGB for contribution of ₹ 3.5 Crore made to Electoral Trust for onward contribution to the political parties, which was allowed to the assessee in the original assessment completed u/s143(3). The assessee objected the re-opening of the concluded assessment and the objection of assessee was overruled in a mechanical manner, the AO was not justified in disallowing the claim u/s 80GGB. The ld AR for assessee invited our attention to the Explanation with section 80GGB, wherein this section refers that for the porpose of this section, the word contribute with its grammatical variation has the meaning as given is section 293A of the Companies Act. Accordingly, the section 293Aof Companies Act permits the contribution to any political parties by a company directly or indirectly. Hence, by virtue of which the contribution to the Electoral Trust is included u/s 80GGB of the Act. The ld. CIT(A) appreciated the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 258 ITR 317 (Del) 20. German Remedies Ltd v DCIT [2006] 287 ITR 494 (Bom) The Ld. AR of the assessee filed the copy of all the decisions in the form of legal Paper Book. 4. We have considered the rival contention of the parties and gone through the orders of authorities below. We have also perused documents submitted before us in the form of PB (documents) and the PB (Legal). The AO re-opened the assessment u/s 147 on the ground that assessee was wrongly granted the deduction u/s 80GGB in respect of its donation to Electoral Trust. The assessee objected to the re-opening of the completed assessment. The objection of the assessee was rejected and AO completed the assessment u/s 143(3) r.w.se 147 and disallowed the deduction, which was originally allowed assessment order u/s 143(3) of the Act. Before the ld. CIT(A), the assessee agitated the action of AO, on the ground that re-opening was invalid and the disallowance u/s 80GGB of the Act. The ground with regard to reopening of the assessment was rejected by ld CIT (A). However, the grounds with regard to the disallowance of claim u/s 80GGB was allowed by the ld. CIT(A). The assessee has no occasion to file the appeal again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be justification in law for the making and the acceptance of the contribution authorized by it. (3) Without prejudice to the generality of the provisions of sub-sections (1) and (2),- (a) a donation or subscription or payment caused to be given by a company on its behalf or on its account to a person who, to its knowledge, is carrying on any activity which, at the time at which such donation or subscription or payment was given or made, can reasonably be regarded as likely to affect public support for a political party shall also be deemed to be contribution of the amount of such donation, subscription or payment to such person for a political purpose; (b) the amount of expenditure incurred, directly or indirectly, by a company on advertisement in any publication (being a publication in the nature of a souvenir, brochure, tract, pamphlet or the like) by or on behalf of a political party or for its advantage shall also be deemed, - (i) where such publication is by or on behalf of a political party, to be a contribution of such amount to such political party, and (ii) where such publication is not by or on behalf of but for the advantage of a political party, to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 3.50 crores, only that amount shall qualify for deduction under section 80GGB, which, through the appellant's Electoral Trust has actually been given away as donation to the entitled political parties. The entitled political parties shall be those which are defined in Explanation below section 80GGC. The appellant shall therefore furnish such details of the actual donations given to the entitled political parties out of the funds of ₹ 3.50 crores contributed by the appellant to the Electoral Trust, during the year. Thereafter, the AO is directed to allow as deduction under section 80GGB, such amount out of the said amount of ₹ 3.50 crores that has actual , been given away as donation to the entitled political parties . 6. We have seen that the ld. CIT(A) correctly appreciating the provisions of section 293 of Companies Act and the deduction in respect of contribution given by the Company to the Political Parties. The order of ld. CIT(A) is based on correct appreciation of the provisions and we do not find any infirmity or illegality for our interference. Thus, the grounds of appeal raised by Revenue in Ground Nos. 1 to 4 (which are interconnected) are dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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