TaxTMI 
TaxTMI 
2026 (7) TMI 276
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....lowance of deduction u/s. 80G of the Act, which was categorised as Corporate Social Responsibility (CSR) expenditure. 4. We have heard the rival submissions and perused the material available on record. The assessee is engaged in the business of manufacturing of Bi-axially Oriented Polypropylene films and in production of flexible packaging films. The return of income for AY 2022-23 was filed by the assessee company on 29.11.2022 declaring taxable income of Rs. 305,81,15,809/-. The assessee during the year under consideration contributed a sum of Rs. 3.55 crores towards CSR activities as under:- a. Contribution to Cosmo Foundation - Rs. 2,80,00,000 b. Amount spent towards social work - Rs. 75,00,000 total Rs. 3,55,00,000 5. The assess suo moto disallowed the expenditure towards CSR activity u/s. 37(1) of the Act and claimed deduction u/s. 80G of the Act in the sum of Rs. 1.40 crores being 50% of donation paid to Cosmo Foundation. It is not in dispute that Cosmo Foundation is registered trust and enjoying exemption u/s. 80G of the Act. Contributions made to such foundation would be eligible for deduction u/s. 80G of the Act as per law. The sho....
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....a Pvt. Ltd. vs. ACIT, in ITA No. 1792/DEL/2019. Thus by following the following findings of coordinate bench decision Interglobe Technology Quotient (P.) Ltd. vs. ACIT, (supra), on which one of us, the judicial member was also in quorum, we sustain these grounds; "7.1 Further, we like to observe that as a matter of fact as per Section 135 of the Companies Act, 2013 ('CA 2013), the qualifying Companies as mentioned therein ITA no. 95/Del/2024 are required to spend certain percentage of profits of last three years on activities pertaining to Corporate Social Responsibility (CSR). The expenditure on CSR, could be by way of expenditure on projects directly undertaken by said companies, such as setting up and running schools, social business projects, etc. Such expenditure would include expenditure otherwise falling for consideration under section 37(1) of the Act. On the other hand, companies, instead of undertaking or participating directly in a project, may choose to give donations to institutions that are engaged in undertaking such projects, which is also a recognized way of compliance of CSR obligation. 7.2 The assessing officer and CIT(A) have relied upon Ge....
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....) of the Act provides that in computing the total income of an assessee, there shall be ITA no. 95/Del/2024 deducted, in accordance with the provisions of this section, such sum paid by the assessee in the previous year as a donation. Further, section 80G(2) lists down the sums on which deduction shall be allowed to the assessee. Section 80G falls in Chapter VIA, which comes into play only after the gross total income has been computed by applying the computation provisions under various heads of income, including the Explanation 2 to section 37(1) of the Act. Thus, there is no correlation between suo-moto disallowance in section 37(1) and claim of deduction under section 80G of the Act. 7.5 As with regard to the reasoning that CSR expenditure are not voluntary but mandatory in nature due to penal consequences, we are of considered view that voluntary nature of donation is by nature of fact that it is not on the basis of any reciprocal promise of donee. The CSR expenditures are also without any reciprocal commitment from beneficiary being philanthropic in nature. The Act permits deduction of donations as per Section 80G of the Act, even though, assessee is not gaining any benefit o....
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....of CIT vs Jindal Steel and Power Ltd. (supra). Which certainly is considerable however as the same need verification of facts, the ground deserves to be allowed for statistical purposes with direction to AO to verify the additional evidences filed before us and then allow the enhanced claim." 8. Respectfully following the same, Ground No. 7 raised by the assessee is restored to the file of the ld AO and allowed for statistical purposes to decide in the light of the decision of the Hon'ble Supreme Court in the case of CIT Vs. Jindal Steel and Power Limited reported in 157 taxmann.com 207. 9. Ground No. 8 raised by the assessee is challenging the action of the lower authorities in not considering the deduction amounting to Rs. 33,34,555 u/s. 80M of the Act. 10. We have heard the rival submissions and perused the material available on record. It is not in dispute that assessee had indeed claimed deduction u/s. 80M of the Act in the sum of Rs. 33,34,555/- in the return of income. The evidence in this regard is enclosed in page 914 of the paper book containing the full copy of the income tax return. There is absolutely no discussion regarding this claim in the assessment order.....
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....es (AEs) arising during the regular course of business of the assessee, the assessee realized the same beyond the agreed credit period, hence the ld TPO observed that the same amounts to capital financing by the assessee to its AEs on which imputation of interest need to be done. Accordingly, the ld TPO made a transfer pricing adjustment on account of interest on outstanding receivables in the sum of Rs. 1,09,51,239. The assessee preferred objections before the ld DRP in this regard. The ld DRP upheld the action of the ld TPO. Accordingly, the ld TPO while giving effect to the directions of the ld DRP adopted the same old transfer pricing adjustment figure of Rs. 1,09,51,239/- which is included in the total transfer pricing adjustment of Rs. 1,85,35,641, which is subject matter of adjudication of Ground No. 9 above. This issue is no longer res integra in view of the decision in assessee's own case for AY 2020-21 in ITA No. 4176/Del/24 dated 23.04.2025. The relevant operative portion of the order is reproduced here 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 ....