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TMI BlogTaxability of CSR fund: Treatment of certain funds received by an entity, particularly focusing on whether these funds should be included in the income and expenditure account or directly transferred to the balance sheetX X X X Extracts X X X X X X X X Extracts X X X X ..... I 655 - ITAT DELHI Overview This detailed article provides an analysis of a significant decision by the Income Tax Appellate Tribunal (ITAT), which addresses complex issues surrounding tax exemptions under the Income Tax Act. The case involves intricate legal arguments concerning the treatment of specific funds and their inclusion or exclusion in the computation of taxable income. Context and B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account. * The handling of ₹33,157,338 received for disaster relief and rehabilitation, which, similarly, was transferred directly to the balance sheet. The entity, in its cross-objection, raised concerns about the jurisdiction of the ITO who selected the case for scrutiny and questioned the validity of the notices issued under section 143(2) of the Income Tax Act 1961. Legal Analysis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had to consider whether the funds were rightly excluded from the entity's taxable income, given their specific nature and purpose. Tribunal's Decision and Reasoning * On Jurisdiction and Notices: The Tribunal's decision on the jurisdictional issue and the validity of notices was crucial, as it impacted the legality of the entire assessment process. * Treatment of Swach Bharat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the context of tax exemptions. It underscores the need for careful consideration of the legal provisions related to the treatment of such funds in the context of income tax assessments. The Tribunal's analysis and conclusions offer valuable insights into the application of tax laws, particularly in cases involving unique circumstances like earmarked funds for public welfare projects. This dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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