SREI Equipment Finance Limited Vs CIT (Appeals) (ITAT Kolkata)
ITAT Kolkata Allows 80G Deduction on CSR Donation & MAT Relief on Special Reserve; Disallows RBI Reserve Claim
Facts
- Assessee, an NBFC, transferred ₹52.69 Cr to Special Reserve u/s 45IC (RBI Act) & sought deduction under both normal provisions & MAT u/s 115JB.
- Donated ₹3 Cr to SREI Foundation (CSR activity), claimed deduction u/s 80G of ₹1.5 Cr (50%).
- Transferred ₹29.98 Cr to special reserve u/s 36(1)(viii) & claimed exclusion from MAT computation.
- Claimed deduction for employees’ ESI contribution deposited next working day as due date fell on Sunday.
- AO disallowed all claims; CIT(A) confirmed.
Tribunal’s Observations
RBI Reserve (u/s 45IC)
- Following earlier years, held as mere appropriation of profit.
- Not deductible under normal or MAT computation.
CSR Donation & 80G
- Donation to SREI Foundation qualifies for 50% deduction u/s 80G.
- Only donations to Swachh Bharat Kosh & Clean Ganga Fund excluded.
- Allowed deduction of ₹1.5 Cr.
Special Reserve u/s 36(1)(viii) & MAT
- Such reserve not to be added back in MAT computation.
- Taxable only on withdrawal.
- Relief granted to assessee.
ESI Contribution
- One-day delay condoned since due date fell on Sunday.
- Payment next day deemed within time; disallowance deleted.
Decision
- Appeal partly allowed.
- Disallowed: ₹52.69 Cr claim for RBI Reserve.
- Allowed: Deduction u/s 80G (₹1.5 Cr), MAT exclusion u/s 36(1)(viii) Reserve (₹29.98 Cr), & ESI contribution.
CSR donations to approved institutions remain eligible u/s 80G, RBI Reserve appropriation not deductible, special reserve u/s 36(1)(viii) excluded from MAT, & holiday-related payment delays in statutory contributions are condonable.
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