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The Assessing Officer ("AO")/CIT(A) erred in denying the deduction of Rs. 90,81,516/- claimed by the Appellant under Section 80G of the Income-tax Act

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Sec. 80G of Income Tax Act, 1961— Deduction —Assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing ‘Total Taxable Income”.

Facts: AO from details furnished by assessee observed that assessee claimed deduction amounting to Rs. 90,81,516/- under section 80 G towards donation paid. AO was of the opinion that claim made under section 80 G was not allowable as amount was forming part of CSR expenses debited to profit and loss account. AO was of the opinion that donation made outside CSR expenses was only eligible to be claimed under section 80 G.AO thus disallowed the deduction claimed u/s 80G. Aggrieved by addition made by AO, assessee preferred appeal before CIT (A). CIT (A) was of the opinion that sum paid need to be donation for the purpose of being eligible for deduction under section 80 G. He was of the opinion that, sum paid by assessee was not voluntary, which is an essential element to treat the amount to be donation. The disallowance made by AO was thus upheld. Aggrieved by order of CIT (A), assessee is in appeal before Tribunal.

Held, that Ld.AR submitted that all payments forming part of CSR does not form part of profit and loss account for computing Income under the head, “Income from Business and Profession”. It has been submitted that some payments forming part of CSR were claimed as deduction under section 80G for computing “Total taxable income”, which has been disallowed by authorities below. In our view, assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing ‘Total Taxable Income”. If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature. Thus, authorities below have erred in denying claim of assessee under section 80G. We also note that authorities below have not verified nature of payments qualifying exemption under section 80G and quantum of eligibility as per section 80G(1). Under such circumstances, we are remitting the issue back to Ld.AO for verifying conditions necessary to claim deduction under section 80G. Assessee is directed to file all requisite details in order to substantiate its claim before AO. - FIRST AMERICAN (INDIA) PVT. LTD. V/s ASSTT. CIT - [2020] 80 ITR (TRIB) 538 (ITAT-BANGALORE)