TaxTMI 
TaxTMI 
2026 (8) TMI 353
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....spect of donations aggregating to Rs. 10,87,43,245/- paid to eligible institutions/trusts classified as Corporate Social Responsibility expenditure in the books of account. The disallowance of deduction under section 80G of the Act is unwarranted and ought to be deleted. 2. The learned Commissioner of Income-tax (Appeals) erred in upholding the adjustment made by the Assessing Officer by reducing stamp duty value of Rs. 83,40,922/-instead of actual sale consideration of Rs. 75,16,017/- from block of assets. 3. It is submitted that the reduction in written down value of block of assets is contrary to the provisions of section 43(6)(c) of the Act. The adjustment made by the Assessing Officer is arbitrary and without considering the objections. 3. The ground no.1 pertains to the disallowance of Rs. 4,90,18,859/- on account of deduction claimed under section 80G of the Act in respect of donations aggregating to Rs. 10,87,43,245/- paid to eligible institutions/trusts classified as Corporate Social Responsibility(CSR) expenditure in the books of account. The AO made the disallowance holding that CSR expenses are expressly disallowable as per section 37(1) of the Act.....
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....ld.CIT(A) failed to take due consideration of the decisions relied upon by the assessee in this respect which are on identical claim of deduction allowed on CSR expenses u/s. 80G of the Act. On merits of the case, issue whether the CSR expenditure is allowable u/s. 80G of the Act or not is no more res integra as the issue is covered in favour of the assesses by a catena of decisions by various co-ordinate Benches of the Tribunal. The Mumbai Bench of the Tribunal in the case of Alubond Dacs India (P.) Ltd. in (2024) 163 taxmann.com 536(Mum)considered the provisions of Companies Act and Income Tax Act and held as follows: "11. We have heard the rival submissions and perused the materials available on record. The only morn question to be decided here is whether the expenditure towards CSR activities are an allowable deduction u/s 80G of the Act. The CSR expenses are governed by section 135 of the Companies Act, 2013, Schedule VII of the Act and Companies (CSR) Policy Rules, 2014 where companies having net worth of Rs 500 crores of more or turnover of Rs. 1000 crores or more or net profit of Rs 5 crores of more have to mandatorily comply with the CSR provisions specified us. 1....
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.... the Act. The amendment brought about by Finance Act, 2015 to section 80G of the Act which had inserted the sub clauses (iiihk) and (iiihl) to be the exception for qualifying a donation for claiming us. 80G of the Act could also be an evidencing factor to substantiate that CSR expenditures which falls under the nature specified in section 30 to 36 of the Act are an allowable deduction u/s. 80G of the Act. 6.1 In the case of Deputy Commissioner of Income-tax vs. Gabriel India Ltd. [2025] 173 taxmann.com 219 (Mumbai-Trib.)[13-03-2025], it was held as under: 7. After giving a thoughtful consideration to the orders of the authorities below, we are of the considered view that the Coordinate Benches have been consistently taking the stand that 80G deduction cannot be denied. The relevant findings in the case of Ericsson India Global Services (P) Ltd. (supra), read as under:- "7. We have considered rival submissions and perused the material on record. We have also applied our mind to case laws cited before us. Undisputedly, expenditure incurred towards CSR is specifically prohibited from being allowed as deduction towards business expenditure by insertion of Explanati....
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.... case of Goldman Sachs Services (P.) Ltd. (supra) has held that the other contributions made under section 135 (5) of the Companies Act are also eligible for deduction u/s. 80G of Ericsson India Global Services Pvt. Ltd. v. DCIT the Act subject to satisfying the requisite conditions prescribed for deduction u/s. 80G of the Act. For this purpose, the issue is remanded to the file of AO to examine the same whether the payments satisfy the claim of donation u/s. 80G of the Act. We find that the case law is fully applicable to the facts of the case. There is no restriction in the Act that expenditure when disallowed for CSR cannot be considered u/s. 80G of the Act. Hence, we remit the issue to the file of AO to verify whether these payments were qualified as donations u/s. 80G of the Act or not, if they qualify as donation u/s. 80G of the Act then the requisite amount deserves to be allowed." 8. Before us, it is the specific contention of learned Counsel of the assessee that the institutes to whom the assessee has donated the CRS fund are registered under section 80G of the Act. Keeping in view the submissions of the assessee as well as the ratio laid down in the judicial prec....
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....se was selected for scrutiny on the issue of large amount of donation. No doubt that the assessing officer during the assessment examined the issue and disallowed donation under section 80G to Urvashi Foundations. Though, there is no discussion about the donation to other charitable trust or institution, however the assessing officer has sought details of donations to all about such charitable trust and institution. We find that the assessee also furnished all required details to the assessing officer. Thus, the assessing officer impliedly accepted the donation to such charitable trust or institution. We find that recently Co-ordinate Bench of Mumbai Tribunal in DCIT Vs Gabriel India (2025) 173 taxmann.com 219 (Mum) on similar issue where the assessee-company claimed deduction under section 80G at the rate of 50% of CSR expenses and furnished receipts of donees evidencing eligibility of deduction under section 80G allowed claim of such assessee. The tribunal while allowing relief to the assessee followed various other decisions of the different benches of the Tribunal. The relevant part of the decision if extracted below. "7. After giving a thoughtful consideration to the ....
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....- Trib.) ) (ITAT Bangalore) (iii) First American (India) Pvt. Ltd. (ITA No. 1762/Bang/2019) Allegis Services (India) Pvt. Ltd. (ITA No. 1693 /Bang/ 2019) Ld. Counsel further submitted that if the intention was to deny deduction of CSR expenses under section 80G, appropriate amendments on lines of section 37(1) should also have been made The Ruby Mills Limited under section 80G of the Act. In the absence of any such amendment, CSR expenses should not be disallowed under section 80G of the Act. 18. We have heard both the parties and perused the records. We find that ITAT, Bangalore Bench in the case of Goldman Sachs Services (P.) Ltd. (supra) has held that the other contributions made under section 135 (5) of the Companies Act are also eligible for deduction/s 80G of Ericsson India Global Services Pvt. Ltd. v. DCIT the Act subject to satisfying the requisite conditions prescribed for deduction u/s. 80G of the Act. For this purpose, the issue is remanded to the file of AO to examine the same whether the payments satisfy the claim of donation u/s. 80G of the Act. We find that the case law is fully applicable to the facts of the case. There is no restriction in the Act that exp....
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....y following the same, we are of the considered view the orders of the lower authorities cannot be sustained. Accordingly, the impugned appellate order is set aside and the AO is directed to allow the deduction claimed. the result, the ground filed by the assessee is hereby allowed. 8. In ground no.2 and 3,the assessee has claimed that the ld.CIT(A) erred in upholding the adjustment made by the Assessing Officer by reducing stamp duty value of Rs. 83,40,922/-instead of actual sale consideration of Rs. 75,16,017/- from the Bock of assets. It is submitted that the reduction in written down value of block of assets is contrary to the provisions of section 43(6)(c) of the Act. The adjustment made by the Assessing Officer is arbitrary and without considering the objections. 9. Facts of the case are that the assessee has challenged the action of the AO in reducing the Written Down Value (WDV) of the block of building assets by Rs. 8,24,905/-, being the difference between the sale consideration actually received on transfer of an office property and the value adopted by the stamp valuation authority. It was contended by the assessee that for the purposes of section 43(6)(c) of the Ac....
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....n of United Marines did not apply to the facts of the case. The WDV of the block could not be altered by substituting the sale consideration by stamp duty value as there is no basis for doing the same as the Act does not provide for the same. He also drew our attention to the provisions of section 43(6)(c ) of the Act in this respect. He placed reliance on the cases of Bhaidas Cursondas and Company(2015) 59 Taxmann.com373(Mum-ITAT) and 3A Composites India Private Limited, Mumbai in ITA No.4096 /Mu m/2 0 24.The ld.DR on the other hand placed reliance on the orders of authorities below. 12. We have carefully considered all relevant facts of the case, perused the records. It is evident that in the instant case, there is no question of any capital gains arising as neither the provisions of section 50 or 50C of the Act are applicable to the facts of the case. The Block of assets never ceased to operate. Therefore, the provisions of section 50(1) or 50(2) of the Act were also not applicable. We further find that identical issue came up for consideration by the coordinate bench of ITAT, Mumbai recently in the case of 3A Composites India Private Limited, Mumbai in ITA No.4096/Mum/2024. ....
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....TA No. 2396/Del/2017) and submitted that the legal fiction of substituting the sale consideration by the Stamp Duty value under section 50C of the Act is created only for the purpose of computing capital gain on the sale of capital assets and not for computing the written down value for claiming deprecation under the head 'profits and gains of the business'. However, the ld.CIT(A) did not accept the contention of the assessee. The ld. CIT(A) referred to the definition of the written down value provided in section 43(6) of the Act, wherein the definition of the 'moneys payable' is defined. According to the ld. CIT(A), the amount payable should be read as per the provision of section 50C of the Act, which is the amount deemed to be received on the sale of the immovable property in case the transfer value is less than the fair market value. The ld. CIT(A) also relied on the decision in the case of ITO vs. United Marine Academy [2011] 130 ITD 113 (Mum), wherein for computing the capital gain on transfer of depreciable asset, the sale consideration is directed to be substituted by the Stamp Duty Valuation of the said depreciable asset. The relevant finding of the ld. CIT....
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....eading of both the provisions together, it is clear that section 50C is applicable while selling of depreciable asset as well. 6.8 Further, the Mumbai ITAT special bench has also delt with the same situation in case of ITO vs. United Marine Academy (2011) 130 ITD 113 (Mum). The extracts of said judgment are re-produced hereunder: In our opinion, the Assessing Officer thus was right in applying the provision of section 50C to the transfer of depreciable capital assets covered by section 50 and in computing the capital gain arising from the said transfer by adopting the stamp duty valuation. We, therefore, answer the question referred to this special bench in the affirmative i.e. in favour of the Revenue and against the assessee. 6.9 In view of the above and having regard to special bench judgment, I am of the considerate view that the stand adopted by Ld. AO is appropriate and the addition carried out is justified. Therefore, the disallowance made by the Ld. AO are being upheld. 8. Before us, the ld. Counsel for the assessee relied on the decision of the Hon'ble Supreme Court in the case of Mancheri Puthusseri Ahmed vs. Kuthiravattam Estate Re....
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.... 10.1 According to the Section 32(1)(ii) of the Act, depreciation on any block of asset is allowed at the rate of percentage prescribed under the Rule on the 'written down value' of block of asset. Before us, the dispute is not in respect of the 'rate of depreciation' but dispute is in respect of the term 'written down value'. In explanation 2 to section 32(1), it is mentioned that for the purpose of sub section, the 'written down value' of the block of the asset shall have the same meaning as in sub section (c) of clause 6 of section 43 of the Act. The relevant section is reproduced as under: 43. Definitions of certain terms relevant to income from profits and gains of business or profession. In sections 28 to 41 and in this section, unless the context otherwise re quires - (1) ......... (2) ... (6) "written down value" means- (a) in the case of assets acquired in the previous year, the actual cost to the assessee; (b) in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to him under this Act, or under the Indian Inc....
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....t to the assessment year commencing on or after the 1st day of April, 1989, the written down value of that block of assets in the immediately preceding previous year as reduced by the depreciation actually allowed in respect of that block of assets in relation to the said preceding previous year and as further adjusted by the increase or the reduction referred to in item (i).] [ Inserted by Act 46 of 1986, Section 8 (w.e.f. 1.4.1988).] Explanation 1. - .................... [Explanation 2-A.-..................... Explanation 2-B.-......................... Explanation 3. -......................... [Explanation 4. -For the purposes of this clause, the expressions "moneys payable" and "sold" shall have the same meanings as in the Explanation below sub-section (4) of section 41.] [Inserted by Act 46 of 1986, Section 8 (w.e.f. 1.4.1988).] [Explanation 5. - .............................. [Explanation 6. - ........................ [Explanation 7. - ............................. 11. The Explanation 4 above has prescribed that the expression "moneys payable"and "sold" shall have the same meanings as in the Expla....
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....uced from opening written down value of block of asset. The inclusive definition provided for insurance, compensation, etc. received in respect of the said property and the price for which the property is sold. The ld. DR is of the view that the above definition of the money's payable is inclusive and, therefore, the fair market value determined by the Stamp Duty Valuation Authority for the purpose of section 50C of the Act would become the price for which the property is sold. The ld. DR relied on the decision of the co-ordinate bench of the Tribunal in the case of United Marine Academy (supra), but in the said case, the issue was in respect of the determination of the capital gain arising from the transfer of the depreciable assets, but in the instant case before us, the issue in dispute is limited to the computation of the depreciation under the head 'profits and gains of the business'. In the instant case, the sale consideration of the building sold is not more than the opening written down value (WDV) of the block including new building acquired, therefore, the section 50 of the Act does not result to any short term capital, hence, said is not applicable over prese....
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....ct of which depreciation is claimed under clause (i) of sub-section (1) of section 32; and (c) which was or has been used for the purposes of business, is sold, discarded, demolished or destroyed and the moneys payable in respect of such building machinery, plant or furniture, as the case may be, together with the amount of scrap value, if any, exceeds the written down value, so much of the excess as does not exceed the difference between the actual cost and the written down value shall be chargeable to income-tax as income of the business of the previous year in which the moneys payable for the building, machinery, plant or furniture became due. Explanation. - Where the moneys payable in respect of the building, machinery, plant or furniture referred to in this sub-section become due in a previous year in which the business for the purpose of which the building, machinery, plant or furniture was being used is no longer in existence, the provision of this sub-section shall apply as if the business is in existence in that previous year.] 12.1 In view of above discussion, the fiction of section 50C can't be extended to the facts of the case, accordingly, we set ....