2021 (9) TMI 1126

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....rt] r.w.r. 8D of the Rules when exempt income is only Rs. 14,451. 3. The assessee has also raised one additional ground which reads as under: "Whether on the facts and in the circumstances of the case and position of law education cess and secondary and higher education cess amounting to Rs. 7,59,662/- is a disallowable expenditure u/s. 40A(ii) of the Act? 4. For admission of this additional ground, strong reliance was placed on the decision of the Hon'ble Supreme Court in the case of NTPC Ltd 229 ITR 383 and Jute Corporation of India Ltd 187 ITR 688. 5. Briefly stated, the facts of the case are that during the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has earned dividend income whic....

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..... 14,451/-. This ground is, accordingly allowed. 11. Coming to the additional ground, we find that such claim has been allowed by the co-ordinate benches in several cases and we refer to the decision in the case of ExlServices.Com India Pvt Ltd ITA No. 7392/DEL/2018. The relevant findings read as under: "20. Before us, Learned AR submitted that assessee in the return of income did not claim deduction for the education cess paid amounting to Rs. 70,98,828/- before the due date of filing return of income. He submitted that Hon'ble Rajasthan High Court in the case of Chambal Fertilisers and Chemicals Ltd. vs. JCIT D.B. ITA No. 52/2018, vide order dated 31.07.2018 has held that education cess is an allowable deduction while computing the....

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....for subject A.Ys. It is the say of the ld. counsel for the assessee that the Hon'ble Rajasthan High Court in the case of Chambal Fertilizers and Chemicals Limited in ITA No. 52/2018 order dated 31.07.2018 has held that education cess is an allowable deduction while computing the income under the head "Profits and gains from profession or business". 35. Even the CBDT, in its Circular No. 91/58/66-ITJ(19) dated 18.05.1967 has clarified that the word "Cess" has been omitted from clause and effect of omission of the word "Cess" is that only taxes paid are to be disallowed in the assessments for the years 1961-63 onwards. 36. In light of the decision of the Hon'ble Rajasthan High Court [supra] we direct the Assessing Officer to allow....