TaxTMI 
TaxTMI 
2025 (5) TMI 790
X X X X Extracts X X X X
X X X X Extracts X X X X
....s completed under Section 143(3) of the Act on 19.09.2022 at total income of Rs. 495,20,10,250/-. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the CIT(A) vide the impugned order and the appeal of the assessee was partly allowed. 4. Now the assessee is in second appeal before us. The following grounds have been taken in this appeal: - "1. The order passed by the NFAC is erroneous and contrary to the provisions of law and facts and therefore needs to be suitably modified. It is submitted that it be so done now 2. The learned CIT(A) erred in law and on facts in upholding disallowance of deduction claimed u/s. 80G of the Act of Rs. 1,78,71,274/- on ground that allowing deduction u/s. 80G would defeat the purpose of CSR expenditure. It is submitted that it be so held now. 3. The learned CIT(A) erred in upholding disallowance u/s. 14A of the Act at Rs. 14,31,36,774/- and not considering the same for Rs. 98,872/- as worked out by the appellant during the assessment proceedings. It is submitted it be so held now. 3.1. The learned CIT(A) erred in upholding the disallowance at Rs. 14....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lobal Solutions (India) (P) Limited vs. DCIT [2023] 203 ITD 14 (Hyd. Tribunal) 3) JMS Mining (P) Limited vs. PCIT [2021] 91 ITR(T) 80 (Kol. Tribunal) 4) FNF India (P) Limited vs. ACIT [2021] 133 tamann.com 251/ITA No.1565/2019 (Bang. Tribunal) 5) Allegis Services (India) Pvt. Ltd. vs. ACIT - ITA No.1693/2019 (Bang. Tribunal) 6. Gujarat State Fertilizers & Chemicals Limited vs. ACIT - ITA No.348/2020 (Ahd. Tribunal) 8. Shri A.P. Singh, Ld. CIT-DR, on the other hand, supported the orders of the lower authorities. 9. We have considered the rival submissions. There is no dispute to the fact that the expenditure incurred by the assessee on CSR activities was suo moto disallowed while computing the income under the head business profit. The assessee had claimed deduction under Section 80G in respect of CSR contribution made to Mukhyamantri Shree Swachchta Nidhi Gujarat. On perusal of provisions of Section 80G of the Act, it is evident that the restriction on deductibility of donation made pursuant to CSR obligation is expressly provided under Section 80G(2)(a)(iiihk)/(iiihl) of the Act in respect of donation made to Swachh Bharat Kosh and Clean Ganga Fund, set up by the Central....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he disallowance of Rs. 14,31,36,774/- u/s 14A of the Act as made by the assessee in the return of income. The action of the Assessing Officer was upheld by the ld. CIT(A) as well. 11. Shri Vishal Kalra, Ld. AR of the assessee explained that the assessee had disallowed Rs. 14,31,36,774/- under Section 14A of the Act in the computation of income out of abundant caution. He explained that in respect of the investments, no direct expenses were incurred by the assessee. The total administrative expense debited to Profit & Loss Account under the head other expenses was Rs. 3.02 crores (excluding donation of Rs. 8.50 crores). Therefore, by applying the ratio of equity share investment to total asset, to this administrative cost of Rs. 3.02 crores, the disallowance under Section 14A worked out to Rs. 1,09,000/- only. He submitted that the Assessing Officer had wrongly made the disallowance of Rs. 14.31 lakhs under Section 14A of the Act without recording any satisfaction as to how the working of the assessee was incorrect. The Ld. AR further submitted that the Ld. CIT(A) had rejected the claim of the assessee on the ground that the claim for lower disallowance should have been made only b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce be restricted to this amount only. A working of this amount was furnished by the assessee which is found to be as under: - Name of Expenses Amount % Proportionate Amount Telephone Expenses 4,63,951 5% 23,198 Office Expenses 3,00,306 5% 15,015 Custodial Charges 96,188/- 5% 4,809 Internet Usage Charges 3,26,695/- 5% 16,335 Bank Charges Expenses 472 1% 5 Salary Expenses 7,90,200 5% 39,510 Total 98,872 15. According to the assessee, only the expenses as mentioned above were attributable to earning of exempt income, out of which proportionate amount of 5% and 1% was allocated by the assessee. An alternate plea was also taken that the total administrative expenses under the head "other expenses" (excluding donation of Rs. 8.50 Crores) was Rs. 3.02 Crores only and by applying the ratio of equity share investment to total asset, the disallowance amount works out to Rs. 1,09,000/- only. As another alternate plea, it was contended that the disallowance amount can't exceed the total other expenses of Rs. 3.02 Crores. In the explanation filed before the AO, the assessee had nowhere explained as to why finance cost of Rs. 2982.39 Crores and e....