TaxTMI 
TaxTMI 
2021 (7) TMI 12
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....In this case, for the A.Y. 2015-16, assessment was taken up for scrutiny and the assessment was completed u/s. 143(3) on total income of Rs. 765,36,27,612/- and the taxable income resulted in Nil after set off of brought forward losses to the extent of total income. Subsequently, the Ld. Pr. CIT has taken the case for revision u/s. 263 for assessee's claim with regard to Rs. 37,46,74,242/- paid in respect of royalty to the State Government which is not allowable deduction as per section 40(1)(iib) of the Act and the claim of Rs. 1,01,65,521/- towards corporate social responsibility, which is also not an allowable deduction as per explanation 2 of section 37(1) of the Act. Accordingly, the Ld. Pr. CIT issued show cause notice to the asse....
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....jala Pathakam for providing drinking water to the surrounding villages, therefore, argued that there is no error in the assessment order passed u/s. 143, hence requested to drop the proceedings. After having heard the submissions of the assessee, the Ld. Pr. CIT observed that the assessee has claimed the expenditure under royalty to others and under the corporate social responsibility in the return of income and the AO neither verified the issues nor brought the information on records. Therefore, viewed that the assessment order passed by the AO was erroneous and prejudicial to the interest of the revenue, hence, set aside the assessment with a direction to reexamine the issues and complete the assessment denovo in accordance with law and e....
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....yalty payment to others. Similarly, expenditure was also claimed under Corporate Social Responsibility. Royalty payment to others was stated to be in respect of industrial water purchased by the assessee from the state government and corporate responsibility was stated to be related to the specific scheme formulated by the state government for NTR Sujala Pathakam providing 20 ltrs of water to surrounding areas, thus, claimed the same as business expenditure. The claim of the assessee in respect of purchase of water from the state government needs to be verified in the light of the claim made in the return of income and the actual expenditure incurred. Similarly, in the explanation, the assessee stated that Andhra Pradesh Water Resources Dev....