Reliance Retail Limited Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that deduction claimed by the assessee under section 80G of the Income Tax Act cannot be denied merely on the ground that the payment also formed part of CSR expenditure under the Companies Act.
Facts- The assessee is a company engaged in the business of trading and merchandising of goods and providing related services. The return of income was selected for scrutiny assessment and notices under sections 143(2) and 142(1) were issued from time to time. The case was also referred to the Transfer Pricing Officer under section 92CA of the Act on 16.07.202, who passed an order dated 27.01.2022 without proposing any adjustment to the arm’s length price. The assessment was completed under section 143(3) r.w.s. 144B of the Act vide order dated 27.09.2022. During the course of assessment proceedings, AO examined various claims made by the assessee and made the various additions and disallowances.
CIT(A) granted partial relief to the assessee. Being aggrieved, both assessee and revenue has preferred the present appeal.
Conclusion- Held that AO has not recorded any cogent dissatisfaction with reference to the accounts of the assessee so as to justify mechanical application of Rule 8D. In the absence of proper satisfaction as contemplated under section 14A(2), invocation of Rule 8D cannot be sustained. Thus, we find no infirmity in the order of the learned CIT(A) in deleting the disallowance made under section 14A read with Rule 8D.
