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TMI Blog2024 (3) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... ,50,000/-. 3. The brief facts are that assessee has claimed deduction u/s. 80GGC of Rs. 10,50,000/-. In response to show-cause notice, the assessee submitted invoices "Rashtravadi" which showed that money was paid for giving some advertisement in the news letter. Even the cheque was drawn in the name of the editor. Accordingly, ld. AO held that same is not allowable for deduction u/s. 80GGC which clearly states that deduction should be made to a political party registered u/s. 29A of The Representation of Peoples Act, 1951 or an electoral trust. The newsletter "Rashtravadi" is neither a trust. In the first appeal, before the ld. CIT (A), assessee made following submissions on this issue:- "It is submitted that during the previous year re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly for the purpose of the business of the appellant and therefore the same are allowable deduction u/s. 37(1) or section 80GGC of the Income-tax Act, 1961. 4. The ld. CIT (A) allowed the deduction after observing and holding as under:- "3.3 The provisions of section 80GGC brought into the statute w.e.f. 11.09.2003 and amended w.e.f. 01.04.2014, requires that any person shall be allowed deduction in respect of any amount of contribution made by her in the previous year to a political party or an electoral trust, except by way of cash. For the purposes of this section, political party, means a political party registered u/s 29A of The Representation of Peoples Act. The explanatory note to the introduction of the section states that "this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t borne out by facts. The appellant has, during the year received sub-contracts from various companies viz. IRB Infrastructure Pvt. Ltd., MEP Infrastructure Developers Pvt. Ltd, Ideal Road Builders Pvt. Ltd., Baramati Tollways Pvt. Ltd. Certain of these parties were related concerns u/s 40A(2)(b), as evidenced from annexure-2 of form 3CB. But related parties together account for only 26.63% of the total expenditure on contracts incurred by the appellant and, therefore, 73.37% of the total expenditure has been incurred for work done for independent and unrelated parties. Therefore, it is not correct to hold that even though transacting sales of 25.14 Crores, the appellant has not done any Independent business for which such expenses need to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is eligible to claim deduction under the provisions of aforesaid section. The Assessing Officer shall decide this issue after examining the documents on record and after affording opportunity of hearing to the assessee, in accordance with law Accordingly, ground No. 1 raised in appeal by the Revenue is allowed for statistical purpose. 6. In the set aside proceedings, ld. AO has analysed invoices and found that assessee made payment to newspaper / newsletter "Rashtravadi" for publishing colour advertisements. Nowhere, the bills mentioned that the payment made to the newspaper is donation to the party even though the newspaper belongs to Rashtravati Congress Party. The payment has been made in the name of "Prabandh Sampadak Rashtravad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled reasoning for making such a claim that it is allowable u/s. 80GGC. The explanation given to this effect reads as under:- "It is submitted that the auditor in notes to accounts at point no. 2.2 has specifically stated that "during the year the assessee has debited in the books of accounts of A.N. Enterprises Rs. 10,50,000/- under the head "Advertisement Expenses" being Advertisements in monthly Magazines These are treated as disallowable u/s. 37(2B) but are allowable u/s. 80GGC of the Income-tax Act, 1961", which is verifiable from page no. 14 of the paper book. Further the auditor in clause 17 of Form No. 3CD has quantified the amount disallowable u/s 37(2B) and also quantified the deduction admissible u/s 80GGC at Rs. 10,50,000/- an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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