TaxTMI 
TaxTMI 
2026 (4) TMI 1482
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Companies Act 2013 and were not 'voluntary donation' to be allowable under section 80G(1) of the Act. 4. That on the facts and circumstances of the case and in law, the Ld. AO/DRP erred in not appreciating that there is no correlation between deduction claimed under section 80G(1) of the Act and expenditure incurred towards Corporate Social responsibility ("CSR") disallowed in terms of Explanation 2 to Section 37(1) of the Act. 5. That on the facts and circumstances of the case and in law, the Ld. AO / DRP failed to appreciate that the eligibility to claim deduction under section 80G(1) is to be considered only as per the conditions stipulated under sub-sections (2) and (5) of Section 80G of the Act. 6. That while doing so the Ld. AD/DRP erred in disregarding that denial of deduction claimed under section 80G(1) considering the sald expenditure incurred towards CSR, which has already been disallowed in terms of explanation 2 to Section 37(1) would lead to double disallowance. 7. That on the facts and in the circumstances of the case and in law, the Ld. AO/DRP erred in denying the enhanced deduction claimed by the Assessee under section 8....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to be considered as part of sale price of goods, it stands benchmarked along with such transaction of sale of goods. 15. Without prejudice, the Ld. AO/Ld. TPO/Ld. DRP erred on facts and in law in Incorrect application of Transfer Pricing Method, as defined under the Act, by arbitrarily considering credit period of 60 days while computing interest on delay in realization of outstanding balances from AEs. 16. That Ld. AO/Ld. TPO/Ld. DRP erred on the facts and in law by not understanding the business model/contractual terms of the Assessee and accordingly erred in not appreciating that even if the interest on outstanding receivables of the AEs is to be considered, then the credit period of 105 days as allowed by the Assessee to its AE is to be considered while computation of interest on outstanding receivables. 17. That the Ld, AO/Ld. TPO/Ld. DRP erred on the facts and in law in arbitrarily computing interest on delay in realization of outstanding balances from AEs considering 60 days as credit period, without appreciating the fact that credit period allowed by the Assessee to Non AE/ unrelated customers is 90 days, which can be considered as Comparable Unco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al evidences filed by the assessee and allow the claim. 5. The Ld. Counsel for the assessee submitted that in the year under consideration i.e. A.Y.2021-22 also the assessee had filed additional ground before the DRP alongwith additional evidences claiming enhanced deduction u/s. 80-IA of the Act by considering market price of electricity as charged by the State Electricity Board to consumers in the open market in terms of section 80-IA of the Act and as per the ratio laid down by the Hon'ble Supreme Court in the case of Jindal Steel and Power Ltd. [2024] (460 ITR 162), for electricity equivalent to energy generated by eligible business units. The Ld. Counsel for the assessee submitted that while making additional claim by way of additional ground before the DRP the assessee has filed all necessary evidences which were all placed at pages 188 to 401 of the paper book and submitted the issue may be restored back to the file of the AO to examine the claim of the assessee, as was directed by the Tribunal in assessee's own case for A.Y.2020- 21. 6. Coming to ground Nos. 8 to 18, the Ld. Counsel for the assessee submitted that these grounds relate to transfer pricing adjustment on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs. 1.19 crore was claimed u/s 80G. At PB 851-853 is the copy of computation of income showing the add back of Rs. 2.38 crores and claim of deduction u/s. 80G of Rs. 1.19 crore. At PB 742-759 are receipts of donation to Cosmo Foundation and Charutar Aarogrya Mandal. 4.1 Now this issue that deduction is admissible u/s. 80G event though initially it was part of CSR, is directly covered by catena of judicial decisions in JMS Mining (P) Ltd. vs PCIT (2021), 130 taxmann.com 118 (Kolkata-trib.); Allegis Services (India) Pvt. Ltd. vs ACIT, in ITA No. 1693/Bang/2019, for AY 2016-17, on 29.04.2020.; M/s Goldman Sachs Services Private Ltd. vs JCIT, in ITA No. 2355/Bang/2019, for AY 2015-16, on 15.06.2020; M/s FNF India Private Ltd. vs. ACIT, in ITA No. 1565/Bang/2019, for AY 2016-17, on 05.01.2021. (CLC 119-125); Interglobe Technology Quotient (P.) Ltd. vs. ACIT, in ITA No.95/DEL/2024; Teradata India Pvt. Ltd vs. DCIT, in ITA No. 1248 & 2337 (Delhi ITAT) 2024.; Honda Motorcycle and Scooter vs. ACIT, in ITA No. 1523/Del/ 2022. Ericsson India Global Services Private Ltd vs. DCIT, in ITA No.1150/DEL/2024.; Optum Global Solutions vs. DCIT, in ITA No. 145 & 482 (Hyderabad ITAT) 2022.; Fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ication of income, is not incurred wholly and exclusively for the purposes of carrying on business, As the application of income is not allowed as deduction for the purposes of computing taxable income of a company, amount spent on CSR cannot be allowed as deduction for. computing the taxable income of the company, Moreover, the objective of CSR is to share burden of the Government in providing social services by companies having net worth/turnover/profit above a threshold. If such expenses are allowed as tax deduction, this would result in subsidizing of around one-third of such expenses by the Government by way of tax expenditure." (emphasis supplied) 7.4 The aforesaid explanatory memorandum categorically expresses the legislative intent and the rationale of disallowance of CSR expenditure referred to in section 135 of the Companies Act, that such expenditure is application of income and not incurred for the purposes of business. We are of considered view that this in itself justifies the grant of deduction u/s 80G. As CSR expenditure is application of income of the assessee under the Income Tax Act, that means it continues to form part of the Total income of the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....07 equivalent to energy generated by eligible business unit. Though deduction u/s 80-IA has been claimed by the assessee in its return of income but assessee seeks to enhance its claim in the light of above judicial decision of Hon'ble Supreme Court by filing a petition for additional ground supported by petition of admission of additional evidence. Assessee has filed at PB 644-658 copy of Form Nos. 10CCB for Karjan and Waluj units computing deduction of Section 80-IA at Rs. 1,23,67,921/- and Rs. 1,17,43,208/-respectively, aggregating to Rs. 2,41,11,13 9/-. PB 851 is computation of income claiming deduction under section 80-IA at Rs. 2,41,11,139/-, PB 104-116 are revised revised Form Nos. 10CCB for Karjan and Waluj units computing deduction under section 80-IA at Rs. 18.95,68,453/- and Rs. 12,07,36,503/- respectively, aggregating to Rs. 31,03,04,955/-. PB 331-332 contain revised computation of Income as per enhanced claim as under section 80-1A. PB 25-332 contain additional evidence justifying inter-alia the claim of deduction under section 80-IA at Rs. 31,03,04,955/-, Enhanced claim of the assessee is based on the judicial decision of Hon'ble Supreme Court in case of CIT v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ify the stand of the Assessee, in accordance with the correct position of law." 13. Since these additional evidences have to be examined by the AO we restore all these additional evidences to the file of the AO for examining the claim of the assessee for enhanced deduction u/s. 80-IA of the Act and pass appropriate order after providing adequate opportunity to the assessee. This ground is allowed for statistical purpose. 14. Coming to ground No.8 to 18 which are in respect of interest on receivables, claim of the assessee was already examined by the Tribunal for immediately preceding assessment years and the Tribunal held as under :- 8. Ground No.10-20 : These grounds related to Transfer Pricing of Rs. 20,62,216/- on account of notional interest relating to alleged delay in recovery of outstanding receivable pertaining to sales made to its associate enterprises. In the draft assessment order (Page no.482-489), Ld. AO proposed an addition of Rs. 98,28,820/- in respect of notional interest on receivables in respect of sales made to AEs. Ld. TPO has mentioned that as per Clause (i) (c) of Explanation to Section 92, 'International Transaction includes capital financi....