SAHARAYN UNIVERSAL MULTIPURPOSE SOCIETY LIMITED,BHOPAL vs. THE COMMISSIONER OF INCOME TAX (APPEALS), BHOPAL

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first-appeal dated 28.03.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 30.12.2017 passed by learned ITO-1(2), Bhopal [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2015-16, the assessee has filed this appeal on following grounds:

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 “1. That the Ld. CIT(A) has erred in law and on facts and circumstances of the case in not considering the fact that the case was selected for limited scrutiny under CASS whereas the Assessing Officer has travelled beyond the reasons recorded for which the case was reopened and as such, the order passed was void ab-initio and bad in law and deserves to be quashed. 2. That the Ld. CIT(A) has erred in law and on facts and circumstances of the case in confirming the order passed by the Assessing Officer ignoring the claim made by the appellant in respect of expenses which were claimed in the revised computation filed during the course of assessment proceedings and were allowable as per the Mercantile System of accounting. 3. That the Ld. CIT(A) has erred in law and on facts and circumstances of the case in not appreciating that the appellant has made a legal claim during the course of assessment proceedings and, therefore, the Assessing Officer is not justified in not considering the same. 4. That the Ld. CIT(A) has erred in law and on facts and circumstances of the case in confirming the disallowance of the claim made by the appellant in the revised computation filed during the course of assessment proceedings although, it is the duty of the Assessing Officer to assess the correct taxable income of the appellant as per the guidelines of the C.B.D.T. 5. That the Ld. CIT(A) has failed to appreciate that the appellant has made a legal claim before the completion of assessment and, therefore, he is not justified in confirming the action of the Assessing Officer in ignoring the same, while at the same time taxing the voluntary offer made by the appellant, whereby the taxable income had increased on ‘pick and choose’ method. 6. That the Ld. CIT(A) has erred in law and on facts and circumstances of the case in holding that the disallowance under section 40(a)(ia) of the Income-tax Act, 1961 of Rs. 193,28,93,248/- in respect of Co-operative Educator Expenses, made under section 40(a)(ia) of the Income-tax Act, 1961 is correct. 7. That the Ld. CIT(A) has erred in law and on facts and circumstances of the case in confirming the addition of Rs 12,75,60,094/- made under section 40(a)(ia) of the Income-tax Act, 1961 in respect of Co-operative Educator Expenses paid to individual, which qua individual does not exceed the threshold limit under section 194H of the Income-tax Act, 1961 and did require any deduction of tax at source.

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 10. That the appellant craves leave to add, alter, amend or withdraw any or all grounds of appeal at any time before or during the course of the hearing.” 2. The background facts leading to present appeal are such that the

assessee is a society governed under the provisions of Multi State Co-

operative Societies Act, 2002. For AY 2015-16 under consideration, the

assessee filed return declaring a total income of Rs. 8,23,095/- (rounded off

to Rs. 8,23,100/-) which was subjected to scrutiny assessment through

notices u/s 143(2)/142(1). During scrutiny proceedings, vide notice dated

04.12.2017 u/s 142(1), the AO asked assessee to furnish certain

details/documents. The assessee filed reply dated 20.12.2017. After

considering assessee’s reply, the AO made certain disallowances and

assessed total income at Rs. 1,95,69,61,360/- as under:

Particulars Amount Income shown in the return of income 8,23,100 Add: Disallowance under section 40(a)(ia) - 30% of the expenses on which TDS was not deducted (i) Rent & Utility charges 1,29,43,872 (ii) Salary Expenses 85,34,595 (iii) Co-operative Educator Expenses 193,28,93,248 (iv) Payment to Contractors 1,86,718 (v) Professional Charges 15,79,826 Assessed income 1,95,69,61,359 Rounded off 1,95,69,61,360

Aggrieved the assessee carried matter in first-appeal and succeeded partly.

Now, the assessee has come in next appeal before us for redressal of

grievances mentioned in the grounds re-produced in the beginning.

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 3. Before us, Ld. AR did not press Ground No. 1 and further submitted

that Ground No. 10 is general. Therefore, these grounds do not require any

adjudication from us. We proceed to adjudicate all other grounds in

subsequent discussions.

Ground No. 2 to 5, 8 & 9:

was not justified in upholding the AO’s action of not allowing assessee’s

claim of deduction of Rs. 6,44,29,77,492/- in respect of “deferred co-

operative educator expenses”.

He submitted that during assessment-proceeding, in the reply-letter dated

20.12.2017 filed to AO, the assessee filed a revised “Computation of Total

Income” (such revised Computation of Total Income is incorporated in Ld.

AR’s Written-Submission re-produced in next Para No. 6 of this order)

making two-fold adjustments, (i) one by of claiming deduction for “deferred

co-operative educator expenses” of Rs. 6,44,29,77,492/- and (ii) other by

way of accepting a total disallowance of Rs. 1,81,94,73,157/- u/s 40(a)(ia)

on account of non-deduction of tax at source (TDS) out of various payments

aggregating to Rs. 6,06,49,10,523/- (which included disallowance of Rs.

1,80,53,33,154/- being 30% of Rs. 6,01,77,77,180/- out of “deferred co-

operative educator expenses” paid without TDS). So far as the first

adjustment of “deferred co-operative educator expenses” is concerned, the

assessee incurred total expenditure of Rs. 6,48,46,95,661/-, out of which

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 expenditure of Rs. 4,17,18,169/- was already debited to P&L A/c and

claimed as deduction but the rest of expenditure amounting to Rs.

6,44,29,77,492/- was treated as a “deferred revenue” in Balance-Sheet and

not claimed as deduction. The assessee, however, submitted to AO that the

expenditure of Rs. 6,44,29,77,492/- though shown as “deferred revenue

expenditure” was relatable to the year under assessment; was in respect of

business undertaken during the year; and was prima facie verifiable from

records. The assessee prayed AO to allow the same as deduction while

framing assessment. In assessment-order, however, the AO has remained

silent qua the first adjustment and thus did not grant deduction of

assessee’s claim of “deferred co-operative educator” expenses of Rs.

6,44,29,77,492/-. But the AO made second adjustment by making a

disallowance of Rs. 1,93,28,93,248/- u/s 40(a)(ia) equivalent to 30% of the

very same expenditure of Rs. 6,44,29,77,492/- for failure to deduct TDS.

During first-appeal, the assessee made a detailed submission to CIT(A)

claiming that the assessee’s valid claim of deduction of Rs. 6,44,29,77,492/-

needs to be allowed but the CIT(A) rejected assessee’s submission and

approved AO’s action with the reasoning that the Hon’ble Apex Court has

held in Goetze (India) Vs. CIT (SC) 284 ITR 323 that the AO cannot allow

the claim made by assessee through revised Computation of Total Income

without filing return/revised return of income. This is the crux of issue.

show that the claim of assessee deserves to be allowed. Subsequently after

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 hearing, as per liberty granted by Bench, the Ld. AR also filed a Written-

Submission incorporating very same submission as under:

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16

during hearing and subsequently after hearing, as per liberty granted by

Bench, he also filed a Written-Submission incorporating very same

submission as under:

“GROUND NO.2 TO 5 AND 8 & 9 1.00 Through these grounds the assessee has challenged the act of the assessing officer and the CIT(A) in not considering the revised computation of income filed by the assessee during the course of assessment proceedings

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 regarding the claim of deduction of deferred revenue expenditure of Rs.644,29,77,492/- in respect of co-operative educator expenses. 2.00 In this regard, it is submitted as under: (i) The learned CIT(A), at para 9.1 & 9.2, has dealt with the issue of allowability of deferred revenue expenditure claimed by the assessee through filing of revised computation of income before the assessing officer. The CIT(A) has upheld the act of the AO in not allowing such claim in absence of revised return of income by relying the rationale laid by the Hon’ble Apex Court in the case of Goetze (India) vs. CIT (SC) 284 ITR 323. (ii) Your Honours, the law provides a specific remedy for an assessee to revise a return of income under section 139(5) of the Act. If they failed to do so, they cannot bypass this statutory requirement by merely submitted a revised computation before the AO or the Appellate Authorities. Reliance is placed on the following judicial pronouncements:

a. Goetze (India) Ltd. Vs. CIT (2006) 284 ITR 323 (SC) i. The Hon’ble Supreme Court held that the AO cannot entertain fresh claims unless they are made through a revised return of income ii. Since, the assessee has only filed a revised computation and not a revised return of income the AO was correct in rejecting the claim. b. Kerala Chemicals & Proteins Ltd. (2010) 323 ITR 584 (Ker HC) c. CIT vs. MiteshImpex (2014) 367 ITR 85 (Guj HC) (iii) Your Honours, the assessee seeks to rely upon a line of judicial authorities to contend that a new legal claim may be raised at any stage of appellate proceedings. At the outset, we do not dispute the proposition that appellate authorities enjoy wide powers under the Income-tax Act, including the power to admit legal claims not raised before the lower authorities. However, with utmost respect, it is submitted that the reliance placed on the judgments by the assessee is misconceived in the factual matrix of the present case, and overlooks the distinction between legal and factual claims, a distinction that is not merely academic but jurisprudentially vital.

(iv) In CIT vs. Pruthvi Brokers & Shareholdings Ltd. (2012) 349 ITR 336 (Bom), the Hon’ble Bombay High Court has held that appellate authorities are not constrained by the limitation that binds the Assessing Officer in Goetze (India) Ltd. However, the judgment itself clearly qualifies the principle by stating that appellate authorities may entertain purely legal claims, provided the necessary facts are already on record. However, in the present case, the assessee seeks to introduce a fresh, substantial claim of Rs. 644 crore, styled as “deferred revenue expenditure,” which was not disclosed in the original return and not supported by a revised return. This is not a mere legal plea. It is a composite factual claim, requiring a thorough enquiry into

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 the nature, timing, treatment, and evidentiary basis of the expenditure. Such a claim is not covered by the protection of Pruthvi Brokers. (v) In CIT vs. Jai Parabolic Springs Ltd. (2008) 306 ITR 42 (Del), the Hon’ble Court dealt with an appellate claim based on material already part of the assessment record. The Hon’ble Court permitted the claim because it did not necessitate any factual verification beyond what was already available. In contradistinction, the claim here involves significant evidentiary scrutiny — an exercise never undertaken by the Assessing Officer, precisely because the assessee did not invoke the correct legal procedure by filing a revised return under Section 139(5). The decision is, therefore, inapplicable. (vi) The judgment of Raj Rani Gulati vs. CIT (2012) 249 CTR 51 (All), reiterates that legal grounds can be raised at any stage. However, the term "legal ground" cannot be stretched to encompass a new factual claim of the magnitude and complexity sought to be introduced here. A fresh deduction of over Rs. 644 crore cannot be characterized as a “legal ground” merely because it is couched in statutory terminology. The claim demands a factual inquiry, and as such, is outside the purview of what appellate authorities may consider in the absence of adequate record. (vii) Once again in CIT vs. Sam Global Securities Ltd. (2014) 360 ITR 682 (Del) this judgment turns on the limited premise that appellate forums may entertain new legal pleas. It does not and cannot override the settled principle that factual claims requiring examination of fresh material must be properly raised before the Assessing Officer, following the prescribed statutory route. The assessee here has sought to bypass this mandate, which is impermissible.

3.00 Your Honours, the Hon’ble Supreme Court in Goetze (India) laid down with clarity that a claim not made in the return of income, and not revised through the statutory route, cannot be entertained by the Assessing Officer. The Hon’ble Court, however, clarified that this limitation does not curtail the powers of appellate forums under Section 254.But, crucially, Goetze (India) is not merely about forum competence, it is about discipline in procedure. When a statutory mechanism exists for making a revised claim, that mechanism must be honoured. To allow a massive and fact-laden claim to be admitted casually via a revised computation is to render otiose the legislative intent behind Section 139(5).

4.00 In view of the above, it is respectfully submitted that while appellate authorities may have the jurisdiction to entertain new legal grounds, that jurisdiction must be exercised judiciously and not so liberally as to dilute statutory discipline.

The assessee's claim:

 is not a legal plea in the narrow sense.  involves substantial factual elements and requires investigation.

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16  was never made through a revised return despite the availability of such remedy.

Accordingly, the Assessing Officer was correct in rejecting the claim, and the learned CIT(A) has rightly upheld that rejection. The invocation of judicial precedents in support of a fundamentally procedurally defective and factually intensive claim is wholly untenable.”

assessee, even if not allowed by AO, deserves to be allowed by this Tribunal

which is an appellate authority. He submits that a legal claim can be

admitted by appellate authorities and the decision of Goetze (India) does

not come in the way of CIT(A) or ITAT which are appellate authorities. For

this proposition, he relies upon following decisions:

(i) CIT Vs. Jai Parabolic Springs Ltd. 306 ITR 42 (Del) (ii) Raj Rani Gulati Vs. CIT 249 CTR 51 (All) (iii) CIT Vs. Pruthvi Brokers & Shareholdings 349 ITR 336 (Bom) (iv) CIT Vs. Sam Global Securities Ltd. 360 ITR 682 (Del)

Ld. AR also takes support from National Thermal Power Company Ltd. Vs.

CIT (1998) 229 ITR 383 (SC).

reasoning that the assessee’s claim is not a legal plea only, it involves

substantial factual investigation and that the claim was never made through

a revised return.

no quarrel on the proposition laid down by the Hon’ble Supreme Court in

Goetze (India) (supra) that the claim for deduction not made in the return

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 of income cannot be entertained by AO in absence of a revised return.

However, the decision of Hon’ble Supreme Court does not stop here. The

Hon’ble Supreme Court has further held in para 4 of same judgment as

under:

“However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income- tax Appellate Tribunal u/s 254 of the Income-tax Act, 1961.” From this, it is very clear that the restriction has been placed on the power

of AO for not entertaining any claim of deduction otherwise in absence of

revised return. However, this judgement does not lay down that the

appellate authority shall have any fetters on its powers in entertaining a

claim made without filing a revised return which is otherwise sustainable in

law.

Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC) that the Tribunal has

jurisdiction to examine a question of law which arises from the facts as

found by the authorities below and having a bearing on tax liability of the

assessee notwithstanding the fact that it was not raised before CIT(A).

Further, when we consider the judgement of the Hon’ble Supreme Court in

Goetze (India) (supra) in juxtaposition to National Thermal Power

Company Ltd. (supra), it becomes quite clear that although the assessee

cannot make a claim before AO otherwise than through the return of income,

but there are no restrictions on the power of the Tribunal to entertain such

claim for examination provided the facts exists on record. The decision of

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 Goetze (India) (supra) has also been analysed in various decisions relied by

Ld. AR as mentioned by us in earlier Para 8 of this order, the relevant paras

of those decisions have already been extracted in Ld. AR’s Written-

Submission re-produced by us in earlier Para 6 of this order. In those

decisions, it has been categorically held that the Goetze (India) (supra) only

restricts the power of AO but does not restrict the power of appellate

authorities to admit a valid claim of assessee. Futhermore, these are also

settled judicial propositions that (i) no tax shall be levied or collected except

by authority of law [Article 265 of Constitution] and (ii) the purpose of

assessment proceedings is to assess correct tax payable by an assessee in

accordance with law [CBDT Circular No. 14-XL(35) dated 11.04.1955].

Therefore, these authorities are clear point that the ITAT can very well admit

claim of assessee provided the facts are available on record.

audited accounts were available before AO wherein “Note 13 - Other

Expenses” depicts “Co-operative Educator Expenses – Rs. 4,17,18,169/-”

and “Note 8 – Short term Loans & Advances” depicts “Co-operative Educator

Expenses (Deferred) – Rs. 6,44,29,77,492/-”. These both entries are of the

same expenditure, the only difference is that the first part has been debited

in P&L A/c and claimed as deduction in return of income whereas the

second part has been treated as “deferred expenditure” in Balance-Sheet

and not claimed as deduction in return of income. Therefore, the claim is

very much apparent from records. It is also noteworthy that the AO has

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 himself invoked section 40(a)(ia) and made disallowance of Rs.

1,93,28,93,248/-, equivalent to 30% of the very same expenditure of Rs.

6,44,29,77,492/- on the footing of non-deduction of TDS out of same. Under

such a situation, in our considered view, the revenue cannot take a stand

that the facts of the issue are not on record.

assessee as “deferred expenses” in books of account, the Ld. AR has placed

reliance on following decisions:

(i) CIT Vs. Lila Sons Breweries Pvt. Ltd. 306 ITR 314 (MP) (ii) DCIT Vs. Core Health Care Ltd. 308 ITR 263 (Guj) (iii) Silc on Graphs Systems (P) Ltd. Vs. DCIT 17 SOT 29 (Del) (URO) (iv) DCIT Vs. Godrej Tea Ltd. (Mum ITAT) 29 CCH 135 (v) CIT Vs. Casino India Ltd. (Delhi) 335 ITR 196 (vi) CIT Vs. Berger Paints (India) Ltd. (Cal) 254 ITR 503 (vii) Kedar Nath Jute Manufacturing (SC) 82 ITR 363.

The Ld. AR has also extracted the decision of Godrej Tea Ltd. (supra) in his

Written-Submission reproduced by us in earlier Para 6 of this order. Ld. DR

for revenue is not disputing the Ld. AR’s submission in this regard.

of “deferred co-operative educator expenses” made by assessee and grant

appropriate deduction after carrying out such exercise as the AO may

consider necessary. While doing so, the AO shall also take into account

that the assessee has not claimed deduction of impugned expenditure

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 in any subsequent year(s). We also direct the assessee to extend full

participation and co-operative to AO as and when called upon. These

grounds are allowed with these directions.

Ground No. 6 & 7:

by AO u/s 40(a)(ia) and upheld by CIT(A).

earlier, the assessee filed a revised Computation of Total Income making

two-fold adjustments, (i) one by of claiming deduction for “deferred co-

operative educator expenses” of Rs. 6,44,29,77,492/- and (ii) other by way of

accepting a total disallowance of Rs. 1,81,94,73,157/- u/s 40(a)(ia) on

account of non-deduction of tax at source (TDS) out of various payments

aggregating to Rs. 6,06,49,10,523/- (which included disallowance of Rs.

1,80,53,33,154/- being 30% of Rs. 6,01,77,77,180/- out of “deferred co-

operative educator expenses” paid without TDS). The AO did not allow

deduction of Rs. 6,44,29,77,492/- on account of “deferred co-operative

educator expenses” but, however, made disallowance of Rs.

1,93,28,93,248/- u/s 40(a)(ia) equivalent to 30% of Rs. 6,44,29,77,492/-.

Thus, the AO made disallowance of Rs. 1,93,28,93,248/- although the

assessee proposed disallowance of Rs. 1,80,53,33,154/- only in revised

computation. In short, the AO made excessive disallowance by Rs.

12,75,60,094/- [Rs. 1,93,28,93,248 (-) Rs. 1,80,53,33,154].

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 17. Now, in Ground No. 6, the assessee is firstly attacking the entire

disallowance of Rs. 1,93,28,93,248/- made/upheld by lower-authorities for

the reason that when the authorities have not allowed deduction of “deferred

co-operative expenditure” of Rs. 6,44,29,77,492/- in computing taxable

income of business, how can they make disallowance u/s 40(a)(ia)?

Thereafter, in Ground No. 7, the assessee is also challenging the quantum

of disallowance made by AO. It is being contended that the AO has made

disallowance of Rs. 1,93,28,93,248/- u/s 40(a)(ia) equivalent to 30% of

entire expenditure of Rs. 6,44,29,77,492/- as against disallowance of Rs.

1,80,53,33,154/- proposed by assessee. Here, the assessee’s grievance is

such that the AO has not given the benefit of payments made below the

threshold limit of section 194H.

qua these issues. Subsequently after hearing, as per liberty granted by the

Bench, Ld. AR filed a Written-Submission incorporating very same pleadings

as under:

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16

subsequently after hearing, as per liberty granted by Bench, Ld. DR also

filed a Written-Submission incorporating his submission as under:

“GROUND NO. 6 & 7

1.00 At the threshold, it is respectfully submitted that the assessee’s alternate argument under Ground Nos. 6 & 7 that the disallowance under section 40(a)(ia) of the Act does not arise since the claim of Rs.644.29 crores was not allowed by the CIT(A), is misconceived, both on a plain reading of the statute and on settled principles of tax law.

2.00 Section 40(a)(ia) is a non obstante provision, which overrides sections 30 to 38. The relevant portion reads:

“Notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head ‘Profits and gains of business or profession’...”

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 3.00 On a plain reading of the provision, it would be observed by Your Honour that this construction makes it amply clear that section 40(a)(ia) is not contingent upon an allowance being made, it is a preliminary disqualification clause. The Assessing Officer is duty-bound to examine any expenditure against this bar before allowing the same.

4.00 The assessee's submission that the section 40(a)(ia) disallowance "does not arise" unless the claim is first allowed is, with respect, legally untenable. The disallowance under section 40 is a screening mechanism, not a consequence. It operates independently of the allowability under other sections.

5.00 It is further submitted that the assessee has attempted to rely upon a revised computation furnished during the course of assessment to justify the alternate quantum of disallowance. However, as held by the Hon’ble Supreme Court in Goetze (India) Ltd. v. CIT [(2006) 284 ITR 323 (SC)], a revised computation cannot substitute a revised return under section 139(5). The Assessing Officer, therefore, was under no obligation to entertain or act upon the revised computation.

6.00 In fact, the entire quantification of Rs.180.53 crores by the assessee, which seeks to carve out amounts purportedly falling below the threshold limit under section 194H is based solely on this unauthorised computation. There is no evidentiary trail, no transaction-wise or recipient-wise breakup, and no credible documentation placed on record to support this figure.

7.00 The burden of establishing that TDS was not deductible in certain cases due to threshold exemption rests squarely on the assessee. In the absence of detailed ledgers, party lists, payment amounts, and contract copies, the mere assertion that some payments fall below the limit cannot be accepted.

8.00 Moreover, the treatment of Rs.644.29 crores as deferred revenue expenditure in the books of account stands in direct conflict with the assessee’s alternate prayer for deduction in the same year. It is well-settled that the assessee cannot approbate and reprobate having capitalized the amount in its audited balance sheet, it cannot now assert revenue deductibility without reopening its own accounts.

9.00 The reliance on the mercantile system of accounting also does not assist the assessee, as consistency in method and presentation is a foundational requirement. One cannot follow mercantile principles selectively to claim deductions not recognized as expenses in the books themselves.

10.00 In sum and substance, the disallowance under section 40(a)(ia) is:

(i) Valid in law;

(ii) Based on amounts debited to the P&L and/or identified from the assessee’s replies;

(iii) Independently sustainable irrespective of whether the full deduction was granted;

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 (iv) Not undermined in any manner by the alternate computation now offered.

11.00 In view of the above, the Revenue most respectfully submits that Grounds 6 and 7, as raised by the assessee does not require any merit interference. The disallowance under section 40(a)(ia) of the Act, as upheld by the learned CIT(A), is legally correct, factually grounded, and therefore, the same may please be sustained in full.”

perused the orders of lower-authorities. In so as these grounds are

concerned, we extract the following prayer made by Ld. AR in his Written-

Submission re-produced above:

5, 8 & 9, we have directed the AO to allow assessee’s claim of “deferred co-

operative educator expenses” after necessary examination, we agree to Ld.

AR’s prayer that the issue of disallowance u/s 40(a)(ia) out of those

expenses, shall have to be re-visited by AO only if the AO ultimately allows

the deduction of those expenses. Further, the AO shall restrict disallowance

to an appropriate amount after giving benefit of threshold limit prescribed in

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Saharayn Universal Multipurpose Society Limited, ITA No. 425/Ind/2024 - AY 2015-16 section 194H. Accordingly, we remand these Ground No. 6 & 7 to the file of

AO for consideration afresh taking into account these aspects.

Order pronounced by putting up on notice board as per Rule 34 of ITAT Rules, 1963 on 07/05/2025

Sd/- Sd/-

(PAWAN SINGH ) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Indore

िदनांक/Dated : 07/05/2025

Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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