TaxTMI 
TaxTMI 
2017 (4) TMI 1495
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....tion 143(2) dated 08.08.2013 was issued and duly served on the assessee. During the year under consideration, an amount of Rs..1,00,000/- on which weighted deduction of Rs..1,75,000/- under section 35(1)(ii) of the Act was claimed to have been donated by the assessee to M/s. Herbicure Healthcare Bio-Herbal Research Foundation ["Herbicure" in short], Kolkata. The association was approved under section 35(1)(ii) of the Act and Notification to this effect held also been passed in the Gazette of India In order to confirm the donation contributed, the Department has sent a letter to the M/s. Herbicure and vide their letter dated 26.12.2014 M/s. Herbicure confirmed the voluntary donation of Rs..1,00,000 lakhs from the assessee. A copy of the trust's Corporation Bank statement in which the donation received was also sent by the trust. 2.1 As per the information received from the ACIT, Non Corporate Circle 3, Chennai along with copy of the sworn statement recorded from Shri Swapan Ranjan Das Gupta, Founder Director of M/s Herbicure by the Office of the Director of Income Tax (Inv.), Kolkata during the course of survey under section 133A of the Act on 27.01.2015 at M/s. Herbicure. In the s....
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....ate of donation given by the assessee, the organisation has been approved under section 35(1)(ii) of the Act and therefore, she prayed the disallowance made by the Assessing Officer and confirmed by the ld. CIT(A) should be deleted. 5. On the other hand, the ld. DR strongly supported the orders of authorities below. 6. We have heard both sides, perused the materials available on record and gone through the orders of authorities below. First we shall adjudicate the issue as to whether withdrawal of approval under section 35(1)(ii) of income tax act apply retrospectively for exemption claimed by the assessee. Vide Notification No. 35/2008 dated 14.03.2008, the organization Herbicure Healthcare Bio-Herbal Research Foundation, Kolkata has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the Act with effect from 01.04.2007. In view of the above notification, donation offered to the above institution is exempted to claim deduction under section 35(1)(ii) of the Act. Thus, the assessee paid donation of Rs..1,00,000 lakhs to the above institution. This fact was not under dispute. Since the assessee as given donation, claimed deduc....
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....f the Act. The Assessing Officer disallowed a sum of Rs..2,89,666/- being the expenses incurred towards earning the exempt income. In the assessment order, the Assessing Officer has not given any basis and details of disallowance made under section 14A of the Act, such as total investment made by the assessee, application of relevant provisions of Income Tax Rules, etc. Moreover, Assessing Officer has made the disallowance over and above the dividend income earned by the assessee. Against the dividend income of Rs..1,78,833/-, the Assessing Officer disallowed the expenditure to the extent of Rs..2,89,666/-. As per the case law filed by the assessee, in case of Joint Investments Pvt. Ltd. v. CIT 372 ITR 694, the Hon'ble Delhi High Court has observed and the head-notes are as under: Income-Expenditure incurred in relation to income not includible in total income-Disallowance-Assessee was engaged in diverse investment activities and in the course of its business derived income from rent, sale of investments, dividend and interest-For AY 2009-10, assessee had reported a loss of specified amount-Assessee declared tax exempt income in the form of dividend to the tune of Rs. 48,90,000-A....
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.... interest and others on the loan borrowed is concerned, the finding of the Tribunal is at paragraph 11 which reads as under: "11. The revenue is in appeal and we have considered the rival contentions. IN our view, the recent judgment of the Special Bench in Bombay in ITO v. Daga Capital Management Pvt. Ltd (2009) 312 ITR (AT) 1, is applicable to the facts of the present case. In this order, it has been held that section 1 4A is applicable even where the motive in acquiring the shares was to obtain controlling interest in the companies. The finding of the Commissioner of Income-tax (Appeals) cannot, therefore, be upheld as it is contrary to the decision of the Special Bench. We, accordingly, uphold in principle the applicability of section 14A. However, it is for the Assessing Officer to ascertain from the facts of the case as to how much interest bearing borrowings was utilized to acquire shares in the companies. It is also necessary to see as to whether any interest bearing borrowed funds were used in making the advances and expenditure in the case of Castle Breweries. This factual exercise has to be carried out by the Assessing Officer after giving due opportunity to the assess....