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TMI Blog2025 (5) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon grievance in AY 2018-19, 2019-20 and 2020-21 relate to the deletion of disallowance of management fees u/s 40A(2)(a) of the Act. 3. Briefly stated the facts of the case are that the assessee is a listed company engaged in the business of manufacturing of ride control products and components thereof. Its flagship company is Anand Group which has more than 19 companies in auto component manufacturing. Anand Automotive Private Limited (AAPL) is engaged in business of providing management and corporate services to group companies including the assessee. While scrutinising the return of income the AO noticed that the assessee has made payment of management fee to AAPL. The AO disallowed 20% of the management fee of Rs. 5.46 Crores and made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAPL group company, along with copies of invoices raised and also ledger account of management fee in books of account, which has been duly examined. The assessee company has also brought on record detailed quantification of services rendered by group company, but the AO without questioning the same on merit merely proceeded to made the addition on ad hoc basis by way of estimation and guess work which is not sustainable in the eyes of law. 8. The Id DR for the revenue has failed to dispute the legal proposition mooted out by the coordinate bench of Tribunal in case of Spicer India pvt. Ltd (supra) wherein, identical services were also taken from AAPL @2.85% of sales of the assessee. Moreover, expenditure has to be examined with the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A), the ld. CIT(A) was of the opinion that this quarrel has been decided by the Tribunal in favour of the assessee in the case of Ericsson India global services (P.) Ltd. vs. DCIT [2024] 160 taxmann.com 599 (Delhi-Trib.) wherein, the Coordinate Bench has held that Section 80G deduction could not be denied. Similar were the facts before the Mumbai Tribunal in Rustomjee Realty Private Limited ITA No.1585/Mum/2023. 6. Before us, the ld. D/R strongly objected to the decision of the ld. CIT(A) and filed a detailed written submissions contending that deduction u/s 80G of the Act cannot be allowed on the expenses disallowed on account of CSR. The ld. D/R relied upon the decision of the Co-ordinate Bench in the case of Agilent Technologies (Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 (for short 'the Act'): The assessee made certain donation to approved institutions or funds and claimed 50% of the total donation made as deduction u/s 80G. This amount also formed part of the CSR initiative of the assessee company which amounts to INR 22,81,29,964/-. It is observed that the assessee has duly disallowed CSR expenditure of INR 22,81,29,964/- debited to the statement of profit and loss under section 37 of the Act. DRP rejected the claim of the assessee by saying that the donation is pursuant to the CSR policy of the company and lacks the test of voluntariness as required under section 80G. The AO has disallowed the claim on the ground that anything donation over and above the CSR u/s 80G will be only allowed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered u/s 80G of the Act. Hence, we remit the issue to the file of AO to verify whether these payments were qualified as donations u/s 80G of the Act or not, if they qualify as donation u/s 80G of the Act then the requisite amount deserves to be allowed." 8. Before us, it is the specific contention of learned Counsel of the assessee that the institutes to whom the assessee has donated the CRS fund are registered under section 80G of the Act. Keeping in view the submissions of the assessee as well as the ratio laid down in the judicial precedents cited before us, we direct the Assessing Officer to allow assessee's claim of deduction under section 80G of the Act, subject to, factual verification of assessee's claim that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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