TMI Blog2021 (10) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... clusively for the purposes of the business. Therefore, we do not find any infirmity in the order of the lower authorities in denying the deduction of the above expenditure u/s 37 (1) - as assessee has obtained donation receipt from all these three organization, which are registered u/s 80G of the income tax act, we direct the learned assessing officer to grant the deduction of the above donation under the above Section. Accordingly, ground number six of the appeal of the assessee is allowed. Disallowance on account of sales tax liability additionally imposed by the sense tax department Mumbai for the period 1/4/1971 31/3/1992 - HELD THAT:- Merely because the assessee has been granted a refund arising out of the above appellate order on 19th of March 2009 of ₹ 223,019 it cannot be said that liability for payment of the sum of ₹ 720,081 arose in assessment year 2010 11. Therefore, the claim of the assessee is undoubtedly allowable for assessment year 2009-10 and correctly disallowable for assessment year 2010 11. Therefore, we confirm the disallowance made by the assessing officer for assessment year 2010 11 in case of the assessee. Thus we do not find any in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eved with the order of the learned CIT A against deletion of the disallowance of ₹ 10,86,07,784/- u/s 14A of the Act. 3. ITA No. 5147/Del/2016 is filed by the assessee wherein the ld CIT(A) has confirmed the certain disallowances. 4. The assessee has raised the following grounds of appeal:- 1. That the order dated 04/07/2015 passed by Learned CIT(A)-19, New Delhi u/s 250 of the Act is bad in law, wrong on facts and void-ab-initio. 2. That on facts, in the circumstances of the case and in law, the Learned CIT(A) erred in confirming the disallowance of ₹ 2,00,00,000/- out of disallowance of ₹ 10,88,07,784/- u/s 14A of the Act 3. Without prejudice to Ground No. 2, the disallowance u/s 14A has been confirmed by CIT(A) in the absence of any exempt income earned by the appellant ignoring the judgments of Jurisdictional High Court of Delhi in the case of Cheminvest Limited vs. ITO, duly cited before him. 4. That on facts, in the circumstances of the case and in law, the Learned CIT(A) erred in not deleting a sum of ₹ 2,00,000/-, initially offered as disallowable u/s 14A of the Act in the return of income which was withdrawn before CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajendra Prasad Moody (1978) 115 ITR 519? 3. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in not upholding the disallowance u/s 14A read with rule 8D of the Income Tax Act, 1961 amounting to ₹ 10,86,07,784/- without considering ratio decidendi as upheld in cases of CIT vs Walfort Share and Stock Brokers P Ltd. [2010] 326 ITR 1 (SC) and Maxopp Investment Vs. CIT [2012] 347 ITR 272 (Delhi) on application of provisions of Section 14A of the Act? 4. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the disallowance amounting to ₹ 10,86,07,784/- u/s 14A read with rule 8D of the Income Tax Act, 1961 without appreciating the fact that the assessee itself has made ad-hoc disallowance u/s 14A of the Act to the tune of ₹ 2,00,000/- by identifying various expenses incurred on employees, establishment expenses etc., suo-moto? 5. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the disallowance amounting to ₹ 10,86,07,784/- under section 14A read with rule 8D of the Income Tax Act, 1961 even when the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) u/s 14A of the Act. There are several issues in the appeal of the assessee. 9. Now first coming to the appeal of the ld AO wherein, the deletion of the disallowance of ₹ 10,86,07,784/- u/s 14A is in challenge. Assessee has also challenged the disallowance u/s 14 A the learned CIT A to the extent of ₹ 2 lakhs which was initially offered is this allowable u/s 14 a of the income tax act in the return of income filed by the assessee as assessee did not have any exempt income as per ground number 2 4 of the appeal of the assessee. These are interconnected issue and therefore same are discussed together and decided accordingly. 10. The ld AO noted that the assessee has shown investment of ₹ 2,729,09 million and has not furnished any calculation of disallowances u/s 14A of the Act but has merely made ad hoc disallowance of ₹ 2 lakhs in the computation of income. Therefore, the assessee was asked to explain as to why the disallowances should not be made according to the Rule 8D of the Act. The assessee submitted that the assessee has not incurred any expenditure by way of interest or other expenditure which can be disallowed u/s 14A of the Act. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al reinsurance Co Ltd 81 ITR 303 was the case where the dividend income was found to be chargeable in different year. Therefore, the judicial precedent cited before us do not apply to the issue before us is there are distinguishable. As the assessee has offered suo moto disallowance of ₹ 2 lakhs, failed to give any breakup of such expenditure, itself said that it has not incurred any expenditure in relation to exempt income, we do not find any infirmity in the order of the learned CIT A in retention of disallowance of ₹ 2 lakhs. Thus, ground numbers 2 4 of the appeal of the assessee are also dismissed. 14. Thus, appeal of the learned assessing officer is dismissed. 15. Now we come to appeal of the assessee. Ground number 1 of the appeal is general in nature, no arguments were advanced, and therefore, we dismiss this ground. 16. Ground number 5 of the appeal of the assessee is with respect to the disallowance sustained of ₹ 557,500 incurred by the assessee on corporate social responsibility claimed as a business expenditure eligible u/s 37 (1) of the income tax act. The ground number 6 is without prejudice to ground number five wherein it is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer has disallowed a sum of ₹ 950,000 on account of sales tax liability additionally imposed by the sense tax department Mumbai for the period 1/4/1971 31/3/1992. The demand was raised as per the order passed by the sense tax officer on 26/9/1978. Assessee paid a demand of ₹ 943,100 on 20/11/1978 and shown it is a deposit recoverable from the sales tax authority and the same was challenged before the higher sales tax authorities. The appeal of the assessee against the above sense tax order was disposed of by the order passed u/s 55 (7) of Bombay Sales Tax Act 1959 on 25/9/2008. As per the order out of the above payment made by the appellant company of ₹ 943,100, the appellate authority confirmed the sense tax demand to the tune of ₹ 720,081 and allowed the refund of ₹ 223,019. The claim of the assessee is seized the sense tax order along with refund was received by the appellant after the disposal of the appeal, finally confirming part of the demand out of ₹ 943,100 the same was accounted for in the books of accounts in respect of previous year relevant to assessment year 2000 11. The refund amount of ₹ 223,019 was also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT 85 ITD 50 (AHD), it has been held that the provisions of Section 153 (3) gives the power to the appellate authority lifting the bar of the time limitation for giving effect to the finding or direction contained in the order of the tribunal regarding bringing to tax the escaped income as well as the claim allowable in different year, we, respectfully following the above judicial precedents, direct the learned assessing officer to grant the above deduction in assessment year 2009 10. Accordingly, ground number 7 of the appeal of the assessee is dismissed subject to allowing the above claim in assessment year 2009 10. 22. Ground number 8 is with respect to the order of the learned CIT A confirming the disallowance of ₹ 83,755/ out of ₹ 125,100 paid towards statutory taxes, which were crystallized during the year. The alternative ground number 9 is that the appellant is eligible to deduction of the above sum considering the provisions of Section 43B of the income tax act since the payment of statutory dues was made before the due date of filing of the return of income for which the evidences were furnished before the appellate authority. 23. Facts shows th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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