TMI Blog2021 (5) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... otto disallowance its basis and its working the assessee failed to provide the same to the ld AO. The ld AO also held that this itself shows that the assessee is contradicting its own stand that it has not incurred any expenditure for earning of the exempt income - we do not find any infirmity so far as the recording of the satisfaction u/s 14A(2) of the AO is concerned for invoking provision of Rule 8D of the Income tax Rules. Administrative and managerial expenditure attributable to the exempt income @0.5% of the average of investment - We do not find any infirmity in the confirming the disallowance of ₹ 13.20 lakhs because the assessee itself has disallowed a sum of ₹ 2 lakhs for which no bifurcation is available. Therefore, only alternative is left is to apply the percentage prescribed under that Rule. The stand of the assessee that it has not incurred any expenditure is devoid of any merit as assessee itself has disallowed a sum of ₹ 2 Lakhs. In view of this, solitary ground of appeal of ld AO and ground No. 2 of the appeal of the assessee are dismissed. Disallowance towards corporate social responsibility expenditure - HELD THAT:- On examination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We do not find that such direction would have caused any grievance to the assessee to that extent. The assessee may have certain TDS certificates validly issued by the deductor not appearing in form no 26AS, there is no reason why assessee should not get credit for the same. Even otherwise, we direct the ld AO to verify the credit claimed by the assessee in return of income and TDS certificates available with it and give credit for the same as pre paid tax in accordance with the law. He may carry out necessary verification , if ld AO deems fit. In the result, ground No. 5 of the appeal is allowed. - ITA No. 2981/Del/2015, ITA No. 2074/Del/2015 - - - Dated:- 27-5-2021 - Shri Prashant Maharishi, Accountant Member And Shri K.N.Chary, Judicial Member For the Assessee : Shri Rohit Jain, Adv, Shri Tarun Sharma, CA For the Revenue : Shri Sohail Malik, Sr. DR ORDER PER PRASHANT MAHARISHI, A. M. 1. These are the cross appeals filed by the assessee as well as the ld AO for assessment year 2009-10 against order of the CIT(A)-6, Delhi dated 27/02/2015. 2. In ITA No. 2981/Del/2015 the revenue has raised following grounds:- 1. Whether on the facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was subsequently revised on 29/03.2011 for ₹ 2375350630/-. Assessment under section 143(3) read with section 92CA of the Act was made on 20.03.2013 made by the ld Additional CIT, Range-5, New Delhi (the learned AO) wherein following additions were made determining total income of the assessee of ₹ 2,55,09,50,210/- against the return income of ₹ 2375350630/-. a. Disallowances u/s 14A of ₹ 1745 lacs b. Disallowances u/s 80G of ₹ 4,99,579/-. c. Disallowances of ₹ 6 lakh u/s 35AC. 6. The assessee aggrieved with assessment order preferred an appeal before the CIT(A). The learned CIT(A) as per order dated 27/02/2015 restricted the disallowances under section 14A of the Act from ₹ 1745 lakhs to ₹ 13,20,000/-. He deleted the disallowance of interest expenditure under section 14A applying Rule 8D but confirmed the disallowance under Rule 8D(2)(iii) of ₹ 13,20,000/-with respect to administrative expenditure. The disallowances of ₹ 4,99,579/- u/s 80G on donation of ₹ 9,99,158/- was confirmed holding that the above expenditure is neither allowable u/s 35AC nor u/s 80G of the Act. With respect to the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the detailed reply of the assessee wherein the assessee relied on the appellate order for assessment year 2001 02 and also for assessment year 2003 04, The ld AO noted 5 different reasons in assessment order and thereafter rejecting the contention of the assessee held that disallowances u/s 14A read with Rule 8D in assesses case is established. He worked out such disallowances at ₹ 1747 lacs. The assessee itself has made disallowances of ₹ 2 lakhs and therefore a balance of ₹ 1745 lakhs disallowed u/s 14A of the act. On appeal before the learned CIT (A), he held that there cannot be any disallowances on account of interest expenditure as on the perusal of the balance sheet he noted that assessee has sufficient interest free funds in the form of share capital and reserves and surplus amounting to ₹ 1123.38 crores against the investment made by the assessee only of ₹ 240.11 crore. He further noted that the assessee has shown net interest income of ₹ 116.53 crores after setting off interest expenditure. He therefore held that in view of excess interest free fund available and net interest income no disallowance of interest is required u/s 14A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT (A) he submitted that it is excessive, as the assessee has not incurred any expenditure in earning the exempt income. 12. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that assessee has earned exempt income of only ₹ 59,40,911/- from tax free bonds of UTI. The fact is not denied that during the course of assessment proceedings the AO asked the assessee to explain that why disallowances cannot be made u/s 14A of the act. After considering the complete reply of the assessee as well as considering the appellate orders in assessee s own case he held that the assessee has stated that no disallowances can be made u/s 14A, however assessee has suo motto disallowed a sum of ₹ 2 lakhs on its own. On the fact recorded by the ld CIT (A) it is also evident that there is no break up or the basis of the disallowances made by the assessee. The learned AO has categorically recorded the satisfaction that the suo Moto disallowances on ad hoc basis clearly shows that the assessee has incurred expenditure for earning of the exempt income. The details reasons given of the ld AO at page 7 and 8 of the assessment order cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is allowable as business expenditure. The ld AO disallowed the same and disallowance was confirmed by the ld CIT(A). 17. The ld AR submitted that these are corporate social responsibility expenditure and therefore, 37(1) of the Income Tax Act, 1961 and alternatively u/s 80G of the Act. However, the ld DR stated that the donation made by the assessee to the various NGOs does not have requisite certificate u/s 80G(5) of the Act and therefore, deduction u/s 80G was denied to the assessee. Alternatively, assessee says that this expenditure is allowable to the assessee u/s 37(1) of the Act. He submitted that not all these expenditure qualify the necessary condition laid down under the Act. 18. We have carefully considered the rival contentions and perused the orders of the lower authorities. It is apparent that the assessee has given donation to various trust, however, all those trust are not recognized u/s 80G(5) of the Act and therefore such donation was not allowable as a deduction under that section. Alternatively, assessee submitted that all these expenditure are incurred for the purpose of the business and therefore it should be allowed u/s 37(1) of the Act. On examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the claim of TDS of ₹ 3,65,51,193/- made in the return of income based on the TDS certificate available was not allowed as tax credit. On appeal before the ld CIT (A) it was noted that the assessee has not been allowed full credit of tax deduction at source at ₹ 3,65,51,193/- as claimed by the assessee in its revised return of income. The ld AO granted the credit only to the extent of ₹ 1,76,64,053/-. The grievance of the assessee is that credit towards TDS is reflected in Form No. 26AS ₹ 2,87,25,997/- was not allowed. The ld CIT (A) directed the ld AO to verify the claim of the TDS made on account of the assessee and allowed TDS credit admissible as per 26AS. According to us the ld CIT (A) has categorically directed to the ld AO to grant credit of TDS as per Form No. 26AS. We do not find that such direction would have caused any grievance to the assessee to that extent. The assessee may have certain TDS certificates validly issued by the deductor not appearing in form no 26AS, there is no reason why assessee should not get credit for the same. Even otherwise, we direct the ld AO to verify the credit claimed by the assessee in return of income and T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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