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TMI Blog2024 (8) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Ld. CIT (A) was right in deleting the disallowances made by AO u/s 14A by following the decision of Hon'ble ITAT in own case of the assessee and not appreciating the facts that the Ld. AO has duly reported his satisfaction in the assessment order in para no. 9 to 12? 3 That the appellant craves leave to add, amend and alter the ground of appeal during the appellate proceedings." ITA No.2960/Del/2023 (A.Y 2018-19) "1. Whether on the facts and circumstances of the case, the Ld. CIT (A) was right in deleting the disallowance of Rs. 3,01,76,803/- u/s 14A of the Act made by the AO without appreciating the fact that the AO has duly recorded his satisfaction with regard to the claim of expenditure in relation to the exempt income which does not form part of total income? 2 Whether on the facts and circumstances of the case, the Ld. CIT (A) was right in deleting the disallowances made by AO u/s 14A by following the decision of Hon'ble ITAT in own case of the assessee and not appreciating the facts that the Ld. AO has duly reported his satisfaction in the assessment order in para no. 9 to 12? 3 That the appellant craves leave to add, amend and alter the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee also provided other details and the working. As per the A.O., the working provided by the assessee is not acceptable as the assessee has arbitrarily attributed the percentage of time of the employee attributable to investment basis. As per the A.O. 'investment decisions are important decisions and are generally taken up by the top management of the company and they devote a substantial portion of their time and expertise in these decisions and the Assessee has attributed five percent of the Emolument of Chief Executive Officer and Managing director and ten percent of Chief Financial Officer to Investment Activity which is not acceptable. Moreover, the Assessee has not provided any basis of such allocation. Similarly, the Assessee attributed 0.28 percent of the indirect expenses to earning of exempt income. The Assessee has not provided any basis of allocation on which the cost was allocated. Moreover, it is mentioned in the report itself under "Limitations and Disclaimers" that the report should not be construed as an audit report and it sets out observations based on a limited and specific review'. Therefore, the AO was of the opinion that the disallowance of expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal for Assessment Year 2016-17 in Assessee's own case in ITA No. 9679/Del/2019 dated 09/01/2023 has been relied, wherein it is held as under:- "6. We have heard both the parties and perused the records. The ld. Counsel for the assessee submitted that the issue involved is squarely covered in favour of the assessee by the decision of this Tribunal in Assessee's own case for AY 2015-16 in ITA No.3449/Del/2019, vide order dated 30.08.2019. He submitted that the ITAT duly held that the AO has not recorded proper satisfaction in not accepting suo moto disallowance made by the AO. He submitted that the facts are identical in this year also. Hence, he submitted that the assessee deserves to succeed on this count itself. Without prejudice to the above submission, the ld. Counsel for the assessee has raised the ground that the Ld. AO be directed to compute disallowance u/s. 14A of the Act r.w.r. 8D of the Rules considering only those investments which has actually earned exempt income then also the assessee to succeed. 2. Per contra, the Ld. DR submitted that the AO has duly recorded the satisfaction and he relied upon the orders of the authorities below. Upon careful consideration, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n taken by the assessee for purchasing the shares/making the investment in shares is to be examined by the AO." 1. Ratio of the decision is applicable to the facts of the case. Following the said decision, we hold that the Assessing Officer has not recorded any objective satisfaction in not accepting suo moto disallowance made by the assessee. Thus, we direct the Assessing Officer to accept the suo moto disallowance made by the Assessing Officer in respect of disallowance under Rule 8D(2)(iii) read with section 14A of the Act". 1. We note that the facts are identical and no defect has been pointed out in this order. Hence, following the precedent, we hold that the additional disallowance made by the Revenue in this case is not sustainable. 2. On the alternative ground also the assessee succeeds in as much as it has been held by the Special Bench in the case of ACIT Vs Vreet Investments Pvt. Ltd. in ITA No. 502/Del/2012 for the assessment year 2008-09 for disallowance u/s 14A r.w.r.8D, only those investment should be considered which has not yielded exempt income. Accordingly, we set-aside the order of the authorities below and decide the issue in favour of the assessee." 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80G which itself a proven fact that legislature has clear contention that apart from these two clauses, all other donations do qualify for deduction. Section 80G(2)(a) allows deduction for 'any sums paid by the assessee in the previous year as donations'. Thus, the deduction allowable is for sums paid as donation. Donations paid to the said Kosh and Fund are not allowable under section 80G(2)(a)(iiihk) and (iiihl) as explained above. What is not allowable is however amounts spent by the assessee in pursuance of CSR in pursuance of section 135 of the Companies Act 2013. Contributions to the said Kosh and Fund are CSR activities included in Schedule VII to the Companies Act 2013, The disallowance for deduction under section 80G vis-a-vis CSR can be restricted only to contributions to these Funds under CSR. It is a well-established rule of interpretation that one must look merely at what is stated in the statute; there is no scope for intendment in law. So only contributions to these two funds will not qualify for deduction under section 80G(2)(a) of the Act. Thus, we find no error or infirmity in the order of the CIT(A) in directing the A.O. to allow the deduction cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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