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of <h1>High Court affirms Appellate Tribunal decisions in tax appeal, upholding deletions and reductions challenged by Revenue.</h1> The High Court upheld the decisions of the Appellate Tribunal and CIT(A) in a tax appeal, finding no errors in the deletion of disallowances and ... Donation paid by the assessee u/s 80G allocation to the unit eligible for deduction u/s 80-IC - HELD THAT:- We note that the donation paid by the assessee has no connection with the unit eligible for deduction under section 80-IC of the Act. The scheme of the Act provides to claim the deduction u/s 80G after claiming all the deduction provided under chapter VI-A of the Income Tax Act. Therefore, the assessee can claim the deduction on account of such donation only against the Gross Total Income after claiming all other deduction. Donation paid by the assessee cannot be claimed as an expense in the profit and loss account as the same has not been incurred wholly and exclusively for the purpose of the business as provided under section 37(1) of the Act. Thus even if the assessee claimed the donation as an expense in the profit and loss account, then it has to be disallowed while computing the income under the head business and profession. Thus, the only option available to the assessee to claim the deduction on account of such donation is only under the provisions specified under section 80G of the Act which can be claimed in the manner as discussed above. Appeal admitted on following question of law - [A] Whether Tribunal erred in deleting disallowance made on account of provision for Employee Long Term Compensation Plan? [B] Whether Tribunal erred in confirming decision of CIT(A) deleting disallowance of depreciation claimed by the assessee at the rate of 60% on the items connected with the VSAT? [C] Whether theTribunal erred deleting reduction of deduction under Section 80IC of the Act? Issues:1. Disallowance of provision for Employee Long Term Compensation Plan2. Disallowance of depreciation claimed on items connected with VSAT3. Reduction of deduction under Section 80IC of the Act4. Allocation of donation paid under section 80G of the ActIssue 1: Disallowance of provision for Employee Long Term Compensation PlanThe High Court considered whether the Appellate Tribunal erred in confirming the decision of CIT(A) to delete the disallowance of Rs. 30,41,081 made on account of the provision for Employee Long Term Compensation Plan. The Tribunal's decision was upheld, indicating that there was no error in law or fact in deleting the disallowance.Issue 2: Disallowance of depreciation claimed on items connected with VSATThe Court examined whether the Appellate Tribunal erred in confirming the decision of CIT(A) to delete the disallowance of depreciation claimed by the assessee at the rate of 60% on the items connected with the VSAT. The Tribunal's decision was upheld, signifying that there was no legal or factual error in confirming the deletion of this disallowance.Issue 3: Reduction of deduction under Section 80IC of the ActThe High Court analyzed whether the Appellate Tribunal erred in law and on facts in confirming the decision of CIT(A) to delete the reduction of deduction of Rs. 29,82,93,291 under Section 80IC of the Act. The Tribunal's decision was supported, indicating that there was no error in law or fact in confirming the deletion of this reduction.Issue 4: Allocation of donation paid under section 80G of the ActThe Court addressed the question of whether the donation paid by the assessee under section 80G of the Act needed to be allocated to the unit eligible for deduction under section 80-IC of the Act. The Tribunal's decision was upheld, stating that the donation had no connection with the unit eligible for deduction under section 80-IC of the Act. The Court agreed with the findings of the Tribunal and declined to interfere in the order, dismissing the ground of appeal of the Revenue.In conclusion, the High Court upheld the decisions of the Appellate Tribunal and CIT(A) regarding the issues raised in the tax appeal, finding no legal or factual errors in the deletions of disallowances and reductions as challenged by the Revenue.
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