#tax deduction

Primary credit cooperative societies can claim tax deductions under Section 80P(2)(d) for interest earned on deposits with other cooperative banks, affirming that such income qualifies as business income derived from cooperative activities. This ruling reinforces the scope of cooperative-specific tax benefits and provides clarity for thousands of rural financial institutions across India.

The ITAT Delhi has ruled that corporate social responsibility (CSR) donations meeting Section 80G conditions qualify for tax deduction, rejecting the Revenue’s attempt to disallow them under Section 37(1). This clarifies that Chapter VI-A benefits are independent of business expense disallowances, protecting companies that fulfill statutory CSR obligations while seeking legitimate tax incentives.

ITAT Mumbai ruled that donations to political parties under Section 80-GGC are ineligible for tax deductions if linked to circuitous cash-return schemes, reinforcing strict scrutiny of political funding legitimacy. The decision impacts taxpayers claiming deductions for donations where the recipient party is involved in fraudulent financial practices.

ITAT Mumbai overturns Rs.6.75 crore disallowance, ruling that professional fees paid to facilitate payments to OFAC-sanctioned entities qualify as deductible business expenditure under Section 37(1) IT Act. The tribunal emphasizes that commercial expediency, not revenue assumptions, determines allowability of such expenses.

ITAT Mumbai disallowed a Rs. 9.9 lakh deduction under Section 80GGC, ruling that donations to a registered but unrecognized political party involved in a nationwide scam are invalid, even with documentary proof. The decision underscores that tax benefits under Section 80GGC are contingent on genuine political contributions, not merely formal compliance.

ITAT Delhi clarifies that income from Renewable Energy Certificates (RECs) is directly linked to the eligible business of power sale and qualifies for deduction under Section 80IA. The ruling sets a precedent for infrastructure financing, ensuring tax benefits for renewable energy projects where RECs are part of the revenue stream.

ITAT Mumbai rules that inter-company cost allocations under Section 37(1) of the Income Tax Act are deductible if backed by a contractual agreement and a rational allocation method. The ruling clarifies that group companies can claim such expenses without disallowance if they demonstrate a clear business nexus and avoid markup, offering relief to corporate taxpayers.

ITAT Mumbai rules that expenses incurred by an overseas NRI desk for Indian operations qualify as deductible head office expenditure under Section 44C of the Income Tax Act, provided they are executive or administrative in nature. The ruling clarifies the scope of allowable deductions for multinational banks and non-resident entities, impacting tax compliance and planning for cross-border operations.

ITAT Mumbai rules that CSR donations, even if mandated under the Companies Act, qualify for deduction under Section 80G if made to eligible entities. The tribunal rejects the double disallowance argument, clarifying that statutory obligations do not negate tax benefits for compliant contributions. This ruling impacts corporate tax planning and CSR compliance strategies.

ITAT Pune rules that CSR contributions to funds like the PM Relief Fund are eligible for deduction under Section 80G of the Income Tax Act, unless specifically barred by statute. The ruling clarifies that the burden of proof lies on the revenue to demonstrate exclusion, impacting corporate tax planning and compliance for CSR expenditures.

ITAT Mumbai holds that interest income earned by co-operative societies from co-operative banks qualifies for deduction under Section 80P(2)(d), clarifying statutory interpretation.

Madras High Court holds that compensation for exchange rate losses qualifies as allowable business expenditure under Section 37 even if not expressly provided in contract.

ITAT Mumbai holds that interest on borrowings used to acquire controlling interest in a foreign subsidiary engaged in the same business is allowable under Section 36(1)(iii) as business expenditure.