DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 1, THANE, ASHAR IT PART, WAGLE INDUSTRIAL ESTATE, THANE WEST vs. MAHYCO MONSANTO BIOTECH (INDIA) PRIVATE LIMITED, SANDOZBAUGH SO THANE

Facts

The Revenue challenged the CIT(A)'s deletion of an addition of Rs. 7 Cr. (MVAT paid under protest) and upheld the disallowance of deductions under sections 80G and 35AC for CSR activities, and an addition related to Trait Fees. The assessee filed cross-objections contesting these additions and disallowances for the assessment year 2017-18.

Held

The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to allow the deduction for MVAT paid under protest under Section 43B. For the assessee's cross-objections regarding deductions under Section 80G and Section 35AC, and the addition of Trait Fees, the Tribunal set aside the CIT(A)'s order and remanded these issues back to the AO for fresh adjudication, allowing the assessee to furnish additional evidence.

Key Issues

1. Whether MVAT paid under protest is deductible under Section 43B of the Income Tax Act, 1961, given the liability might not be finalized. 2. Whether mandatory CSR expenditure qualifies for deduction under Section 80G or Section 35AC of the Income Tax Act, 1961. 3. Whether income from 'Trait Fees' not recognized in books due to uncertainty of recovery should be added to total income.