Are donations inadmissible against the exempt income from a partnership firm?

THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI
BEFORE SHRI AMARJIT SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM

I.T.A. No.5375/Mum/2019

Assessment Year: 2016-17

Jalaj Ashwin Dani Home Villa, 48, Krishna Sanghi Path, Gamdevi, Mumbai-400007.

vs

ACIT,Cir-15(1)(1) Aayakar Bhavan, Maharshi Karve Road, Mumbai-400020

Assessee by: Shri Dalpat Shah (AR)
Revenue by: Ms. Usha Gaikwad (DR)

Date of Hearing: 22/07/2021

Date of Pronouncement: 03/09/2021

O R D E R

On appraisal of the finding of the AO as well as CIT(A), we find that the alternative claim of the assesse in view of provisions u/s 80GGA(2)(bb) of the Act has not been considered and decided, therefore, without going into the merits of the case, we remand the issue before the AO to consider the alternative claim in view of the provisions u/s 80GGA(2)(bb) of the Act in accordance with law by giving an opportunity of being heard to the assessee. Accordingly, this issue is decided in favour of the assessee against the revenue.

2. “On the facts and circumstances of the case, the CIT(A)-24, Mumbai, erred in confirming the disallowance of Rs.15,00,000 claimed u/s 35AC on the ground that such donations are inadmissible against the exempt income from partnership firm ignoring the fact that the said deduction u/s 35AC is to be shown in the Schedule BP of ITR 3.

3. Without Prejudice, the said CIT(A) erred in not appreciating the fact that if a deduction for an expenditure is allowable under different section the claim for such deduction cannot be rejected in the appeal proceedings. The appellant submits that the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT 284 ITR 323 does not debar the appellant authorities in admitting alternate legal claim as held in the case of CIT Vs. Pruthvi Brokers & Shareholders Pvt. Ltd. 349 ITR 336 (Bom).

4. In the result, the appeal filed by the assessee is hereby partly allowed. Order pronounced in the open court on 03/09/2021.

Please find attached the enclosed file for the full judgement