Income Tax Officer-11(3)(1), Mumbai vs Tainwala Holdings Private Limited

Parties Involved

Facts Summary

The assessee filed a return of income declaring total income of Rs. 21,02,320/- on 27.09.2016. The return was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 13.07.2018. The assessee also filed a revised return of income on 30.03.2018 by declaring income at Rs. 21,02,320/-. During the course of assessment, the assessing officer observed that the assessee had shown Rs. 4 crores as donation u/s 35AC under the head other expenses whereas in the original return of income no claim of deduction u/s 35AC was shown under the head other expenses. The assessee was asked to explain as to why the expenses claimed as donation u/s 35AC should not be disallowed since the issue involved in the case on hand was similar to that of A.Y. 2014-15 wherein the expenses claimed u/s 35AC was disallowed in absence of any business activity. The assessee submitted that without prejudice if deduction u/s 35AC is not allowed then alternatively requested to allow deduction u/s 80GGA of the Act. However, the assessing officer rejected the claim of deduction u/s 80GGA on the ground that assessee has not claimed the same in the return of income filed by it. The assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the claim of the assessee of deduction u/s 80GGA of the Act.…

Legal Issues

• 1. Whether the Ld. CIT(A) erred in deleting the disallowance made by the A0 of the deduction claimed u/s 35AC of the Act by the assessee in its ROI of Rs.4,00,00,000/- without considering the merit of the case
• 2. Whether the Ld. CIT(A) erred in deleting the disallowance made by the AO of the deduction claimed by the assessee in its ROI of Rs.4,00,00,000/- without considering the genuine fact of the case that the assessee is not conducting any business activity for the year under consideration and thereby not eligible for claiming deduction u/s. 35AC of the Act

Judgment Outcome

Decided in favour of Revenue.

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