2014 (4) TMI 978

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.... the case and in law, the learned Commissioner of Income Tax (Appeals)- XXI, New Delhi ("The CIT(A)") erred in upholding the action of the Assistant Director of Income Tax (Exemptions), Trust Circle-I Delhi, ("the A.O.") of not granting deduction of interest expense amounting to Rs.1,41,75,000/- paid on loan taken by the appellant on the alleged ground that the appellant had made certain investments and advanced loans in violation of Sec 11 (5) r.w.s. 13(1)(d) of the Income Tax Act, 1961 ("the Act"). 2. The appellant prays that the deduction of aforesaid interest expenses be allowed. Ground II : Not granting deduction u/s 80G of the Act. 1. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the ....

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....r not considering the assessee's claim for deduction under Section 80G. The CIT(A) held that the assessee's claim under Section 80G cannot be entertained because the assessee is not eligible for exemption under Section 11 & 12. He stated that the allowability of deduction under Section 80G is not dependent upon the exemption under Section 11 & 12. In fact, the position would be otherwise. If an assessee is entitled to exemption under Section 11 & 12, the donation to another institution would be considered as application of funds for charitable purposes. The exemption under Section 80G is to be allowed in the case of persons who are not entitled to exemption under Section 11 & 12. 4. Learned DR, on the other hand, relied upon the orders of ....

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....the income of the assessee under the normal provisions of the Income-tax Act. Needless to mention that the Assessing Officer will allow adequate opportunity of being heard to the assessee while recomputing the income. 6. With regard to ground No.2, we find that in the computation of income, the assessee listed the details of total donations amounting to Rs. 56,86,000/-. However, no deduction was claimed by the assessee because the gross total income as per assessee was loss. However, if while recomputing the income the Assessing Officer finds that the gross total income of the assessee is in positive figure, then he will consider the assessee's claim for deduction under Section 80G in accordance with law. We also do not agree with the find....