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TMI Blog2018 (1) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/-. 2. Whether in law and on facts & circumstances of the case, the CIT(A) has erred in deleting the disallowance of Rs. 50,77,701/- u/s.14A of the I.T.Act, 1961." 3. The respondent-assessee has filed an adjournment petition to adjourn the appeal on the ground that the ld counsel for the assessee engaged to represent the case on behalf of the assessee will proceed to Mumbai for attending the part heard matters in Mumbai Benches and will not be available to argue the case. We find that the reason for adjournment is not plausible one, hence the adjournment petition is rejected and the matter is heard and disposed of on the basis of materials available on record and after hering ld D.R. 4. Apropos Ground No.1 of appeal, the facts are th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng substantial relief to the assessee. Ld D.R. emphasized that the decisions relied on by the CIT(A) are not relevant to the facts of the assessee's case. The expenses claimed by the assessee cannot be allowed as the same are not wholly and exclusively incurred for the business purposes of the assessee. Ld D.R. submitted that the assessee has not complied with the requisite conditions u/s.37(1) of the Act to claim the deduction. He also submitted that the assessee has not shown any nexus between the current benefit and figure benefit for the assessee in making such huge donations in the institutions. 7. We have heard ld D.R, perused the orders of lower authorities and materials available on record. We find the assessee has made donations t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the expenditure incurred by the assessee are for charitable purposes. Hence, the deduction under section 37 of the Income-tax Act, 1961 is to be allowed. 8. We also find that the CIT(A) has relied on the decision of Hon'ble Karnataka High Court in the case of CIT vs. Infosys Technologies Ltd., 360 ITR 714 (Kar) has held that the expenditure incurred on social responsibility was laid out or expended wholly and exclusively for purposes of business. The CIT(A) has referred to the amendment made in Finance Act (No.2) 2014 w.e.f. 1.4.2015 in Section 37, wherein, it is declared that for the purposes of sub-section(1) any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts made by the company in its associate companies Hira Ferro Alloys Ltd., in which the assessee is holding almost 40% of shares. The investment in the company is out of borrowed fund from Hira Steels Ltd., and Jagdamba Power and Alloys Ltd., and the interest amounting to Rs. 1,96,52,371/- attributable to the amount of investment of Rs. 16.37 crores has been added to the cost of improvement, thereby interest on borrowed fund of Rs. 1,96,52,371/- was not debited to profit and loss account. It was also submitted that by adding interest expenditure of Rs. 1,96,52,371/- to the cost of investment means reducing the interest expenditure by that amount resulting overall increase of the total income of the assessee, therefore, further disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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