TaxTMI 
TaxTMI 
2023 (12) TMI 1090
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.... Appellant. The above action of the Ld. AO has resulted in double taxation of rental income of INR 52,87,150 already offered to tax. Rejecting deduction claim under section 80G of the Act - INR 63,89,992 3. On facts and circumstances of the case and in law the Ld. AO/ DRP erred in rejecting the deduction of INR 63,89,992 claimed under section 80G of the Act. The Ld. AO/ Ld. DRP has grossly erred in: 3.1. interpreting the provisions of section 80G of the Act in light of provisions of section 37 read with section 135 of the Companies Act, 2013, thereby, ignoring that the provisions of section 37 and section 80G of the Act are laid down on a different footing. 3.2. travelling beyond the provision laid under the Act and wrongly interpreting the provisions of section 135 under Companies Act, 2013 as putting a restriction on the deduction available under section 80G of the Act. 3.3. facts and circumstances of the case and in law by holding that for the payment to constitute a donation it must satisfy the test of voluntariness by placing reliance on the Hon'ble Supreme Court decision in the case of Commissioner of Expenditure Tax, Andhra Pr....
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.... 2,84,09,050/- for taxation hence, the same is added to the total income of assessee. To sum up Rs. 2,84,09,050/- is added to the total income of the assessee." 5. During ld.DRP proceedings the assessee has submitted that out of total addition of INR 2,84,09,050 a sum of INR 2,64,25,750 is attributable to erroneous reporting in the e-TDS return for the year under consideration by Keysight India which resulted in erroneous Form 26AS forming the basis of the said addition. It has further been stated that the Form 26AS has been revised in his case and the assessee has received revised Form 16A duly reflecting the correct income accrued to the assessee. 6. Further, the assessee has submitted that INR 19,73,300/- is attributable to reconciliation of amount reported in form 26AS vis-à-vis audited financials in respect of the lease rental income which has already been offered to tax in the earlier year. The assessee has further submitted a reconciliation of lease rental reflected in the audited financials of the assessee vis-à-vis the revise form 26AS as under: Particulars Amount (in INR) Amount as offered to tax and reported in the audited financials of the a....
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....s meaning will have to be construed from common parlance and legal dictionaries. According to Corpus Juris Secundum, donation means 'an act by which the owner of a thing voluntarily transfers the title and possession of the same from himself to another without any consideration; a gift or grant in gratuity ... (Corpus Juris Secundum, vol. 28, page 53). Thus, to constitute a donation, the payment must be voluntary and not forced or by coercion or operation of law as a part of mandatory legal requirement. This aspect of law came to be expounded by the Hon'ble Andhra Pradesh High Court in PVG Raju, Rajn of Vizianagaram v Commissioner of Expenditure-Tax 1972 86 ITR 267 AP in the following words: "5. We shall, therefore, first advert to the question whether the items of expenditure sought to be exempted under Section 5(j) are or are not donations within the meaning of Section 5(j) of the Act. The term "donation" has not been denned in the Act. Hence, we may refer to the meaning of "donation" as given in the Concise Oxford Dictionary and Corpus Juris Secundum. 'Donation\thing presented, gift, (esp. of money given to institution ....' (The Concise Oxford ....
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....w. There is no suggestion nor evidence that any material return was in contemplation when he spent these sums. Being a politically important man with plenty of money and vitally interested in boosting his Party's standing in the State, he donated liberally for candidates set up by the party. In this view s. 5(j) applies to these donations which earn exemption from the expenditure tax." [Emphasis Supplied) 4.5.5 Thus, according to the law explained by the Supreme Court and the Hon'ble Andhra Pradesh High Court in PVG Rajucited supra, for a payment to constitute a donation, it must satisfy the test of voluntariness. In the case at hand, the payment made as a part of legal compliance of corporate social responsibility requirements under the Companies Act 2013, cannot be said to be a voluntary payment so as to constitute a donation for the purposes of granting deduction under section 80G. 4.5.6 Following the law laid down by the Apex Court in PVG cited supra, the Hon'ble Bombay 53 ITAT, in DCIT v Hindustan Dorr Oliver Ltd(1994) 4S TTJ Mumbai 552,negatived the claim of deduction under section 80G where payment made to 'Academy of General Education, M....
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....ettlement on trust or otherwise for the benefit of any other person...' 30. The Supreme Court described the meaning of the word "donation" in the following words : 'When a person gives money to another without any material return, he donates that sum. An act by which the owner of a thing voluntarily transfers the title and possession of the same from himself to another, without any consideration, is a donation. We do not require lexicographic learning nor precedential erudition to understand the meaning of what many people do every day, viz., giving donations to some fund or other, or to some person or other.' Indeed, many rich people out of diverse motives make donations to political parties. The hope of spiritual benefit or political goodwill, the spontaneous affection that benefaction brings, the popularization of a good cause or the prestige that publicized bounty fetches -these and other myriad consequences or feelings may not mar a donation to make it a grant for a quid pro quo. Wholly motiveless donation is rare, but material return alone negates a gift or donation.' 31. The essence of the matter, therefore, is whether the assessee ....
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....20relied upon by the assessee, in none of these cases the Hon'ble ITAT has considered the test of voluntariness in assessing the deductibility of donation under section 80G and the judgment of Supreme Court in PVG Raju cited supra. These decisions are, therefore, in conflict with PVG Raju cited supra. 4.5.9 Coming to the Memorandum to Finance Bill, the said Memorandum only clarifies that no deduction will be allowed for CSR expenditure as a business expenditure and was not in the context of deductions under section 80G. The Memorandum deals only with business expenditure and, therefore, its extension to other areas stands expressly excluded in terms of the settled principle of interpretation that the explicit mention of one (thing) is the exclusion of another. Expressiouniusestexclusionlterius, goes the Latin maxim, which has been judicially recognized by the Apex Court in many cases.[See Justice K.S. Puttaswamy v UOI [2018] 97 taxmann.com 585 (SC), A.B.C Laminart (P.) Ltd. v AP Agencies 11989| 44 Taxman 442 (SC), Rojer Mathew o South Indian Bank Ltd. 12019] 111 taxman.com 208 (SC), GVK Industries Ltd. v ITO /2011) 197 Taxman 337 (SC), and SEBI v Kanaiya Lal 2017185 ta....