2023 (1) TMI 1525

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....n law, the learned Commissioner of Income-tax (Appeals) CIT(Appeals)] erred in upholding the denial of the deduction by the learned Assessing Officer for a sum of Rs. 79,68,873/- under Section 57(iii) of the Act for the donations of Rs. 85,00,000/- paid by the appellant to the eligible trusts and Institutions as "Expenditure on the objects of Trust. The learned CIT(Appeals) erred in not considering the claims and contentions of the Appellant as contained in the written submissions furnished by the appellant in justification of the claim for the deduction for donations paid and also considering the various case laws cited and referred to in the said submissions. The Appellant prays that the learned Assessing Officer be dire....

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....ion made u/s 57(iii) of the Act was rejected. 3. The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee reiterating the facts reported by the Assessing Officer. 4. During the course of appellate proceedings before the ld. Counsel has contended that assessee is engaged in various charitable activities and the assessee has incurred the expenditure in the form of donation for charitable activities as per the object of the assessee. The ld. Counsel further submitted that assessee has not claimed any deduction u/s 11 & 12 of the Act, therefore, the assessee has rightly claimed deduction u/s 57 (iii) of the Act. The ld. Counsel also referred the judicial pronouncements in the case of Dir....

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....of Sec.11-12 of the Act in the return of income filed from the assessment year 1993-94 on words. Without claiming benefit of Sec. 11 of the Act the assessee has computed its total income under the head income from other sources. The assessee claimed deduction u/s 57(iii) of the Act stating that donation paid were in the nature of expenditure on the object of the trust. The assessee has placed reliance on the decision of Hon'ble Delhi High Court in the case of Deputy Director of Income Tax (Exemption) Vs. Petroleum Sport Promotion Board (2014) 111 DTR (Del) 55 wherein it is held that any expenditure incurred for the purpose of making or earning income is allowable as a deduction. With the assistance of the ld. Representatives we have perused....

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....ent has to be completed in accordance with the provisions of the IT Act; if the income is assessed under the residual head full play must be allowed to s. 57(1). Though prima facie it would appear that the phraseology employed in s. 57(1) is different from s. 37(1). It has been held by the Supreme Court in CIT us. Rajendra Prasad Moody 1978 CTR (SC) 141: (1978) 115 ITR 519 (SC) that s. 57(1) must be construed broadly and the somewhat wider language of s. 37(1) should not affect the interpretation of s. 57(111). The assessee in the present case was created in 1979 with the object of promoting sports; there was no other object and all its constituents were giving grants/funds only for that purpose. In truth and reality the assessee was merely....