JCIT(OSD)-14(1)(1), MUMBAI V. AVENDUS CAPITAL PVT. LTD., MUMBAI

ITA 404/MUM/2025

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which had granted relief to M/s Avendus Capital Pvt. Ltd concerning various disallowances made by the Assessing Officer under the Income Tax Act, 1961 for the assessment year 2020-21. The main issues revolved around the classification of expenses related to the 'ESOP Scheme' as revenue or capital expenditure, the application of section 14A concerning disallowance of expenses related to exempt income, and the deduction claimed under section 80G for CSR expenses. The Tribunal examined precedents and statutory provisions to arrive at its decision, partly reversing the CIT(A)'s order on certain grounds while upholding it on others.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471415 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Other Referred Cases: Maxopp Investment Ltd, Biocon Ltd, Sandvik Asia, Motilal Oswal Securities Ltd, JMS Mining Pvt. Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K.R. SUBHASH
• Assessee Lawyers: ASHISH MEHTA; UJJAVAL GANGWAL
• Keywords: Revenue expenditure; Retrospective amendment; Capital expenditure; Earning of tax free income; Rule 8D
• Section: 143(3); 37; 14A; 37(1); 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 404/MUM/2025 Assessment Year: 2020-21 JCIT (OSD)-14(1)(1), Room No. 432, 4th floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. Vs. M/s Avendus Capital Pvt. Ltd., 901, Platina, 9th floor, Plot No. C59, Bandra Kurla Complex, Bandra East, Mumbai-400051. PAN NO.AABCC 2404 Q Appellant Respondent Assessee by : Mr. Ashish Mehta & Mr. Ujjaval Gangwal Revenue by : Dr. K.R. Subhash, CIT-DR Date of Hearing : 04/03/2025 Date of pronouncement : 06/03/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against order dated 27/11/2024 passed by the learned commissioner of Income- tax(Appeals)-48, Mumbai [in short the Ld. CIT(A)] for assessment year 2020-21, raising following grounds: 1. *Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) right in allowing the expenses on \"ESOP Scheme\" as revenue expenditure, ignoring the fact that expenses incurred on the said scheme are capital in nature and hence not allowed u/s 37(1) of the I.T Act.\" 2. \"Whether on the facts and circumstances of the case and in law, the CIT(A) of disallowance u/s 14A of the Act, ignoring the judgement of Hon'ble Supreme Court in Maxopp Investment Ltd. wherein it is held that the dominant object of investing in shares is irrelevant for interpreting the \"as contemplated in section 14A of the Income tax Act 1961 and Hon'ble Apex Court has assented that section 14A has been introduced to bifurcate the expenditure between taxable and non expenditure re incurred in respect of investment in shares for acquiring and retaining a controlling interest therein is hit by section 14A.» 3. \"Whether on the facts and circumstances of the case and in law, the CIT(A) erred in hold 14A has to be made considering only those investments which yielded exempt income, ignoring the explanation amended to section 14A with retrospective effect which provides for disallowance u/s 14A even if no income is earned d 4. \"Whether on the facts and circumstances of the case and in law, the CIl'(A) erred in holding that the disallowance u/s 14A has to be made considering only those investments which yielded exempt income, ignoring the CBDT circular 5 of 2014 that Rule 8D read with section 14A of the Act provides for disallowance of the expenditure even when the taxpayer in a particular year has not earned any exempt income. 5. \"Whether on the facts and circumstanc law, the CIT(A) erred in allowing the deduction u/s 80G of the Act claimed by the assessee on CSR donation, ignoring the fact that in view of the explanatory notes to Finance Act in with Corporate Social Responsibility (CSR) was specifically disallowed u/s. 37, CSR is mandatory and 80G is voluntary out of profit, the intention of legislature was not to make it a tax saving tool, hence treating the same expense under 2 different heads, would defeat the very purpose of it, hence the sum required to M/s Avendus Capital Pvt. Ltd *Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) right in allowing the expenses on \"ESOP Scheme\" as revenue expenditure, ignoring the fact that expenses incurred on the said scheme are capital in nature and hence not allowed u/s 37(1) of the I.T Act.\" \"Whether on the facts and circumstances of the case and in law, the CIT(A) erred deleting the addition made on account of disallowance u/s 14A of the Act, ignoring the judgement of Hon'ble Supreme Court in Maxopp Investment Ltd. wherein it is held that the dominant object of investing in shares is irrelevant for interpreting the words \"in relation to \"as contemplated in section 14A of the Income tax Act 1961 and Hon'ble Apex Court has assented that section 14A has been introduced to bifurcate the expenditure between taxable and non-taxable income and to disallow the expenditure relatable to exempt income and Expenditure incurred in respect of investment in shares for acquiring and retaining a controlling interest therein is hit by section \"Whether on the facts and circumstances of the case and in law, the CIT(A) erred in holding that the disallowance u/s 14A has to be made considering only those investments which yielded exempt income, ignoring the explanation amended to section 14A with retrospective effect which provides for disallowance u/s 14A even if no income is earned during the year.\" \"Whether on the facts and circumstances of the case and in law, the CIl'(A) erred in holding that the disallowance u/s 14A has to be made considering only those investments which yielded exempt income, ignoring the CBDT circular 5 of 2014 dated 11.02.2014 in which it is clearly mentioned that Rule 8D read with section 14A of the Act provides for disallowance of the expenditure even when the taxpayer in a particular year has not earned any exempt income. \"Whether on the facts and circumstances of the case and in law, the CIT(A) erred in allowing the deduction u/s 80G of the Act claimed by the assessee on CSR donation, ignoring the fact that in view of the explanatory notes to Finance Act in with Corporate Social Responsibility (CSR) was fically disallowed u/s. 37, CSR is mandatory and 80G is voluntary out of profit, the intention of legislature was not to make it a tax saving tool, hence treating the same expense under 2 different heads, would defeat the very purpose of it, hence the sum of Rs. 69,00,000/ required to be disallowed\". M/s Avendus Capital Pvt. Ltd 2 ITA No. 404/MUM/2025 *Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) right in allowing the expenses incurred on \"ESOP Scheme\" as revenue expenditure, ignoring the fact that expenses incurred on the said scheme are capital in nature and hence not allowed u/s 37(1) of the I.T Act.\" \"Whether on the facts and circumstances of the case and in erred deleting the addition made on account of disallowance u/s 14A of the Act, ignoring the judgement of Hon'ble Supreme Court in Maxopp Investment Ltd. wherein it is held that the dominant object of investing in words \"in relation to \"as contemplated in section 14A of the Income tax Act 1961 and Hon'ble Apex Court has assented that section 14A has been introduced to bifurcate the expenditure between taxable income and to disallow the latable to exempt income and Expenditure incurred in respect of investment in shares for acquiring and retaining a controlling interest therein is hit by section \"Whether on the facts and circumstances of the case and in ing that the disallowance u/s 14A has to be made considering only those investments which yielded exempt income, ignoring the explanation amended to section 14A with retrospective effect which provides for disallowance u/s 14A even if no income is \"Whether on the facts and circumstances of the case and in law, the CIl'(A) erred in holding that the disallowance u/s 14A has to be made considering only those investments which yielded exempt income, ignoring the CBDT circular 5 dated 11.02.2014 in which it is clearly mentioned that Rule 8D read with section 14A of the Act provides for disallowance of the expenditure even when the taxpayer in a particular year has not earned any exempt income. es of the case and in law, the CIT(A) erred in allowing the deduction u/s 80G of the Act claimed by the assessee on CSR donation, ignoring the fact that in view of the explanatory notes to Finance Act in with Corporate Social Responsibility (CSR) was fically disallowed u/s. 37, CSR is mandatory and 80G is voluntary out of profit, the intention of legislature was not to make it a tax saving tool, hence treating the same expense under 2 different heads, would defeat the very of Rs. 69,00,000/- claimed 2. Briefly stated facts of the case are that the assessee filed return of income on 13/02/2021 declaring total income 69,44,25,330/-. The return of income selected for the scrutiny assessment and statutory notices under the Income-tax Act, 1961 ( complied with. In the assessment completed under section 143(3) of the Act on 26/09/2022, the Assessing Officer made certain addition/disallowances. Aggrieved, the assessee filed appeal before the Ld. CIT(A) who granted relief to the assessee. Aggrieved with the relief allowed to the assessee, the Revenue is i Tribunal by way of raising 3. In ground No. 1( the Ld. CIT(A) of deleting the addition made by the Assessing Officer for disallowance of ESOP expenses under section 37(1) of the 3.1 The brief facts qua debited ₹7,66,75,028/ based payments to employees ‘which consist based payments’ of ₹ optionally convertible expenses amount of Rs.1,96,75,028/ added in the computation of the income for purposes but the amount of revenue expenditure. M/s Avendus Capital Pvt. Ltd stated facts of the case are that the assessee filed return of income on 13/02/2021 declaring total income . The return of income filed by the assessee was or the scrutiny assessment and statutory notices under tax Act, 1961 (in short ‘the Act’) were issued and complied with. In the assessment completed under section 143(3) of on 26/09/2022, the Assessing Officer made certain lowances. Aggrieved, the assessee filed appeal before the Ld. CIT(A) who granted relief to the assessee. Aggrieved with the f allowed to the assessee, the Revenue is in appeal before the raising grounds as reproduced as above. 1( one), the Revenue has challenged finding of the Ld. CIT(A) of deleting the addition made by the Assessing Officer for disallowance of ESOP expenses under section 37(1) of the The brief facts qua the issue in dispute are that 028/- to the profit and loss account as ‘share based payments to employees ‘which consisted of ‘employee share ₹5,70,00,000/-and ‘employee benefit expenses optionally convertible expenses’ amounting to ₹1,96,75, 1,96,75,028/- was disallowed by the assessee and added in the computation of the income for income he amount of ₹5,70,00,000/- was revenue expenditure. M/s Avendus Capital Pvt. Ltd 3 ITA No. 404/MUM/2025 stated facts of the case are that the assessee filed return of income on 13/02/2021 declaring total income at rupees by the assessee was or the scrutiny assessment and statutory notices under ) were issued and complied with. In the assessment completed under section 143(3) of on 26/09/2022, the Assessing Officer made certain lowances. Aggrieved, the assessee filed appeal before the Ld. CIT(A) who granted relief to the assessee. Aggrieved with the n appeal before the reproduced as above. challenged finding of the Ld. CIT(A) of deleting the addition made by the Assessing Officer for disallowance of ESOP expenses under section 37(1) of the Act. the issue in dispute are that the assessee to the profit and loss account as ‘share- employee share- employee benefit expenses- 1,96,75,028/-. The was disallowed by the assessee and income-tax return as considered as 3.2 During the course of the assessment contended that stock options were granted to the employees at the market price prevailing on the date of the grant of option price) but that stock options vest gradually over the vesting period as per the terms of ESOPs, On completion of the vesting period, the employee may exercise stock options at their discretion for issue of shares against options vested in them against exercise price. The fair value of option was determined based on excess of market value of the stock on the date of the grant and the exercise price. 3.3 The assessee contended that it was engaged in the investment banking and other financial service business where performance of an employee depends on his deals/transactions with client and recover fees for his employer. Therefore ESOP were issued to employees for retention of such highly skilled resources discounting of shares business of the company. 3.4 The assessee referred to the decision of th bench of the Income- Limited Vs DCIT undertaking to issue shares at discounted premium, the company does not pay anything to its employees but incurs obligation of issuing shares at a discounted price on future date in lieu of the M/s Avendus Capital Pvt. Ltd During the course of the assessment proceedings, contended that stock options were granted to the employees at the market price prevailing on the date of the grant of option price) but that stock options vest gradually over the vesting period as per the terms of ESOPs, which is normally from one to On completion of the vesting period, the employee may exercise stock options at their discretion for issue of shares against options against exercise price. The fair value of option was sed on excess of market value of the stock on the date of the grant and the exercise price. The assessee contended that it was engaged in the investment banking and other financial service business where performance of an employee depends on his ability to successfully finaliz deals/transactions with client and recover fees for his employer. Therefore ESOP were issued to employees for retention of such highly skilled resources, hence the expenditure incurred discounting of shares to employees was in the interest of the business of the company. The assessee referred to the decision of the Hon’ble special -tax Appellate Tribunal in the case of DCIT (2013) 144 ITD 21 and submitted undertaking to issue shares at discounted premium, the company does not pay anything to its employees but incurs obligation of issuing shares at a discounted price on future date in lieu of the M/s Avendus Capital Pvt. Ltd 4 ITA No. 404/MUM/2025 roceedings, the assessee contended that stock options were granted to the employees at the market price prevailing on the date of the grant of option (exercise price) but that stock options vest gradually over the vesting period which is normally from one to five years. On completion of the vesting period, the employee may exercise stock options at their discretion for issue of shares against options against exercise price. The fair value of option was sed on excess of market value of the stock on the The assessee contended that it was engaged in the investment banking and other financial service business where performance of y to successfully finalize deals/transactions with client and recover fees for his employer. Therefore ESOP were issued to employees for retention of such the expenditure incurred on the interest of the e Hon’ble special ppellate Tribunal in the case of Biocone and submitted while undertaking to issue shares at discounted premium, the company does not pay anything to its employees but incurs obligation of issuing shares at a discounted price on future date in lieu of the services, which is nothing but an expenditure under section 37 the Act. The Hon’ble Karnataka High Court in (2020) 121 taxmann.com 351 further affirmed Tribunal (supra) and noted that primary object of issuing shares a discounted price to the employees is not to waste capital but profits by securing consistent services of the employees and therefore same cannot be construed as short receipt of capital. The assessee contended that in above a joint reading of the provisions of section 43(2) the Act, the term ‘expenditure actually paid but also any obligation incurred in relation to the same by an assessee. 3.5 Further, the assessee referred to the decision of Hon’ble Supreme Court in the case of Assam (1995) 27 ITR 34 and submitted that the aim and object of the expenditure determine the character of the expenditure whether it would be a capital expenditure or revenue expenditure and the source or the manner of the payment would then be of no consequence. He submitted that when a company undertakes to issue shares to its employees date, the primary object of this exercise is not to raise share capit but to earn profit by securing the consistent and concentrated efforts of its dedicated employee during the vesting period. It was further submitted that ESOP expenditure should be regarded as M/s Avendus Capital Pvt. Ltd services, which is nothing but an expenditure under section 37 . The Hon’ble Karnataka High Court in (2020) 121 taxmann.com 351 further affirmed the order of the special bench ribunal (supra) and noted that primary object of issuing shares a discounted price to the employees is not to waste capital but profits by securing consistent services of the employees and therefore same cannot be construed as short receipt of capital. The assessee contended that in above decisions, it was held that as per a joint reading of the provisions of section 43(2) and section 37(1) of expenditure’ should refer not only to the amounts actually paid but also any obligation incurred in relation to the same by an assessee. the assessee referred to the decision of Hon’ble n the case of Assam Bangal Cement Co. Ltd Vs CIT and submitted that the aim and object of the expenditure determine the character of the expenditure whether it a capital expenditure or revenue expenditure and the anner of the payment would then be of no consequence. He submitted that when a company undertakes to issue shares to its employees at discounted premium on the future date, the primary object of this exercise is not to raise share capit t by securing the consistent and concentrated efforts of its dedicated employee during the vesting period. It was further submitted that ESOP expenditure should be regarded as M/s Avendus Capital Pvt. Ltd 5 ITA No. 404/MUM/2025 services, which is nothing but an expenditure under section 37(1) of . The Hon’ble Karnataka High Court in (2020) 121 the order of the special bench ribunal (supra) and noted that primary object of issuing shares at discounted price to the employees is not to waste capital but to earn profits by securing consistent services of the employees and therefore same cannot be construed as short receipt of capital. The it was held that as per and section 37(1) of should refer not only to the amounts actually paid but also any obligation incurred in relation to the the assessee referred to the decision of Hon’ble Cement Co. Ltd Vs CIT and submitted that the aim and object of the expenditure determine the character of the expenditure whether it a capital expenditure or revenue expenditure and the anner of the payment would then be of no consequence. He submitted that when a company undertakes to discounted premium on the future date, the primary object of this exercise is not to raise share capital t by securing the consistent and concentrated efforts of its dedicated employee during the vesting period. It was further submitted that ESOP expenditure should be regarded as revenue in nature as it does not result in the creation of any asset for the company and primarily it is a consideration for the services rendered and effectively, it amounts to additional remuneration for the employees. 3.6 Further, the assessee submitted that expenditure of discount on shares issued to employees being for attracting retaining and incentivising employees, therefore it was related to the services of the employee or expended wholly and exclusively for the purpose of the business of the assessee company. 3.7 Further, it was submitte Tribunal in the case of the assessee for assessment year 2010-11 and 2011-12 held the expenditure on ESOP as revenue expenditure. 3.8 The learned Assessing Officer assessee for two reasons. employees while issuing shares employees, but it affects the capital of the company and leads to change in the amount of the share capital and number shares, accordingly it is shown in the balance sheet and not in the profit and loss account, hence it is the special leave petition(SLP) filed by the M/s Avendus Capital Pvt. Ltd revenue in nature as it does not result in the creation of any asset pany and primarily it is a consideration for the services rendered and effectively, it amounts to additional remuneration for the assessee submitted that expenditure of discount on shares issued to employees being for attracting retaining and incentivising employees, therefore it was related to the services of the employee, hence should be regarded as laid out or expended wholly and exclusively for the purpose of the business of the assessee company. was submitted that coordinate bench of the ribunal in the case of the assessee for assessment year 12 held the expenditure on ESOP as revenue Assessing Officer rejected the contention assessee for two reasons. Firstly, the discount allowed to the employees while issuing shares though might be for retaining the employees, but it affects the capital of the company and leads to mount of the share capital and number shares, accordingly it is shown in the balance sheet and not in the profit and loss account, hence it is a capital expenditure. the special leave petition(SLP) filed by the Revenue against the order M/s Avendus Capital Pvt. Ltd 6 ITA No. 404/MUM/2025 revenue in nature as it does not result in the creation of any asset pany and primarily it is a consideration for the services rendered and effectively, it amounts to additional remuneration for the assessee submitted that expenditure of discount on shares issued to employees being for attracting, motivating, retaining and incentivising employees, therefore it was related to should be regarded as laid out or expended wholly and exclusively for the purpose of the business d that coordinate bench of the ribunal in the case of the assessee for assessment years 2009-10, 12 held the expenditure on ESOP as revenue the contentions of the , the discount allowed to the though might be for retaining the employees, but it affects the capital of the company and leads to mount of the share capital and number of the shares, accordingly it is shown in the balance sheet and not in the capital expenditure. Secondly, against the order of the Hon’ble Karnataka High Court in t pending before Hon’ble Supreme Court. 4. On further appeal, the Ld. CIT(A Tribunal in the case of the assessee for assessment year 2010-11 and 2011-12, deleted the addition. 5. Before us, the made twofold arguments. debited total expenses of employees which comprised of two payments, payment of ₹5,70,00,000/- towards employee share ₹1,96,75,028/- towards employee benefit expenses convertible expenses. The learned DR expenditure of ₹1,96,75, itself being in the nature of justification for claiming the ₹5,70,00,000/- as revenue expenditure exclusively for the purpose of the business. that expenditure claimed by th and the actual expenditure could be determined only the after completion of the vesting period and the option actually exercised by the employee for purchasing shares a submitted that no actual d who exercised the option along with details of cash discount have been filed by the assessee, therefore as fa M/s Avendus Capital Pvt. Ltd of the Hon’ble Karnataka High Court in the case of Biocone Ltd was pending before Hon’ble Supreme Court. On further appeal, the Ld. CIT(A) following the finding of the ribunal in the case of the assessee for assessment year 12, deleted the addition. the Learned Departmental Representative made twofold arguments. Firstly, he submitted that the assessee debited total expenses of ₹7,66,75,028/- as share-based payment to employees which comprised of two payments, payment of towards employee share-based payments and towards employee benefit expenses convertible expenses. The learned DR contested 1,96,75,028/- has been disallowed by the assessee itself being in the nature of capital expenditure, there is no justification for claiming the identical expense as revenue expenditure for incurring wholly for the purpose of the business. Secondly that expenditure claimed by the assessee is a notional expenditure and the actual expenditure could be determined only the after completion of the vesting period and the option actually exercised by the employee for purchasing shares at a discounted price. He submitted that no actual details of the name and No. of employees who exercised the option along with details of cash discount have by the assessee, therefore as far as determination of M/s Avendus Capital Pvt. Ltd 7 ITA No. 404/MUM/2025 he case of Biocone Ltd was ) following the finding of the ribunal in the case of the assessee for assessment years 2009-10, Learned Departmental Representative (DR) , he submitted that the assessee based payment to employees which comprised of two payments, payment of based payments and towards employee benefit expenses- optionally contested that the has been disallowed by the assessee capital expenditure, there is no identical expense amounting to for incurring wholly and Secondly, he submitted e assessee is a notional expenditure and the actual expenditure could be determined only the after completion of the vesting period and the option actually exercised discounted price. He etails of the name and No. of employees who exercised the option along with details of cash discount have determination of quantum of expenditure verification. 6. Before us the learned counsel for the assessee relied on the finding of the coordinate bench of the T assessee for earlier years, but he failed to provide name and address of the employees, provided cash discount on purchase of shares of the company. 7. We have had rival submission of the parties and perused the relevant material on record. The issue in dispute involved is whether the cash discount issued to employees on shares under ESOP expenditure or revenue expenditure. In the case of the assessee the coordinate bench of assessment year 2015 assessee’s own case for assessment year 2016 deleted the addition made by the Assessing Officer under: “4. After perusing the ITAT orders of the Coordinate Bench in appellant's own case, it observed that the appellant c entitled to claim ESOP expenses are allowable expenses under section 37(1) of the Income Tax Act.As the facts and circumstances are similar, the decision of the Coordinate Bench in appellant's own case is followed. In ITA No. 1738 & 1739/Mum/2023 Bench decided the issue in favour of the respondent and relevant portion is reproduced as \"5. We have carefully perused the orders of the authorities below and the decision of the Tribunal brought to our M/s Avendus Capital Pvt. Ltd quantum of expenditure to be allowed, is concerned, same need e us the learned counsel for the assessee relied on the of the coordinate bench of the Tribunal in the case of the assessee for earlier years, but he failed to provide name and employees, who actually exercised ESOP option and ed cash discount on purchase of shares of the company. We have had rival submission of the parties and perused the relevant material on record. The issue in dispute involved is whether the cash discount issued to employees on shares under ESOP scheme should be treated as capital expenditure or revenue expenditure. In the case of the assessee the coordinate bench of Tribunal in ITA No. 6547/Mum/2024 for assessment year 2015-16, following the decision of the T own case for assessment year 2016-17 and 2017 deleted the addition made by the Assessing Officer 4. After perusing the ITAT orders of the Coordinate Bench in appellant's own case, it observed that the appellant c entitled to claim ESOP expenses are allowable expenses under section 37(1) of the Income Tax Act.As the facts and circumstances are similar, the decision of the Coordinate Bench in appellant's own case is followed. In ITA No. 1738 & 1739/Mum/2023 for A.Y. 2016-17 & 2017-18, the ITAT \"A\" Bench decided the issue in favour of the respondent and relevant portion is reproduced as under :- \"5. We have carefully perused the orders of the authorities below and the decision of the Tribunal brought to our M/s Avendus Capital Pvt. Ltd 8 ITA No. 404/MUM/2025 is concerned, same need e us the learned counsel for the assessee relied on the ribunal in the case of the assessee for earlier years, but he failed to provide name and who actually exercised ESOP option and ed cash discount on purchase of shares of the company. We have had rival submission of the parties and perused the relevant material on record. The issue in dispute involved is whether the cash discount issued to employees on purchase of scheme should be treated as capital expenditure or revenue expenditure. In the case of the assessee the in ITA No. 6547/Mum/2024 for following the decision of the Tribunal in 17 and 2017-18 has deleted the addition made by the Assessing Officer, observing as 4. After perusing the ITAT orders of the Coordinate Bench in appellant's own case, it observed that the appellant company is entitled to claim ESOP expenses are allowable expenses under section 37(1) of the Income Tax Act.As the facts and circumstances are similar, the decision of the Coordinate Bench in appellant's own case is followed. In ITA No. 1738 & 18, the ITAT \"A\" Bench decided the issue in favour of the respondent and relevant \"5. We have carefully perused the orders of the authorities below and the decision of the Tribunal brought to our notice. The grievance of the assessee is that the Ld. CIT(A) erred in confirming the disallowance of Rs. 1,20,47,684/ claimed u/s. 37(1) of the Act towards Employee Stock Option Plan (ESOP) expenses as capital expenditure. An identical issue was considered Bench Bangalore in the case of Biocon (supra) has held that ESOP expenses is an allowable deduction u/s. 37(1) of the Act. The same view was followed by ITAT Pune Bench in the case of Sandvik Asia (supra). Respectfully following th aside the order of the Ld. CIT(A) and direct the AO to allow the ESOP expenses as revenue 7.1 Therefore, in principle we agree with the contention of the assessee that the issue in dispute is cove assessee, but, we also agree the concern of the learned departmental representative that actual amount which is allowable to the assessee following the decision of the earlier years has not been explained by way of the details of the who actually exercised the share option. In view of the above facts and circumstances, we restore the matter Assessing Officer for allowing the claim of the assessee in accordance with law expenses claimed by the assessee. The ground appeal of the assessee is accordingly allowed for statistical purposes. 8. The ground nos Rs. 7,52,91,644/- in terms of 8D of Income Tax Rules M/s Avendus Capital Pvt. Ltd notice. The grievance of the assessee is that the Ld. CIT(A) erred in confirming the disallowance of Rs. 1,20,47,684/ claimed u/s. 37(1) of the Act towards Employee Stock Option Plan (ESOP) expenses as capital expenditure. An identical issue was considered by the Tribunal Special Bench Bangalore in the case of Biocon (supra) has held that ESOP expenses is an allowable deduction u/s. 37(1) of the Act. The same view was followed by ITAT Pune Bench in the case of Sandvik Asia (supra). Respectfully following the decision of the Co-ordinate Benches, we set aside the order of the Ld. CIT(A) and direct the AO to allow the ESOP expenses as revenue expenditure.\" Therefore, in principle we agree with the contention of the assessee that the issue in dispute is covered in favour of the assessee, but, we also agree the concern of the learned departmental representative that actual amount which is allowable to the assessee following the decision of the earlier years has not been explained by way of the details of the employees who actually exercised the share option. In view of the above facts and circumstances, we restore the matter back to the file of the Assessing Officer for allowing the claim of the assessee in accordance with law after due verification of the quantum of expenses claimed by the assessee. The ground no. 1 ( appeal of the assessee is accordingly allowed for statistical s. 2 to 4 of the appeal, relate to disallowance of in terms of section 14A of the Act read with Rule Income Tax Rules, 1962( in short ‘the Rules’). M/s Avendus Capital Pvt. Ltd 9 ITA No. 404/MUM/2025 notice. The grievance of the assessee is that the Ld. CIT(A) erred in confirming the disallowance of Rs. 1,20,47,684/- claimed u/s. 37(1) of the Act towards Employee Stock Option Plan (ESOP) expenses as capital expenditure. An by the Tribunal Special Bench Bangalore in the case of Biocon (supra) has held that ESOP expenses is an allowable deduction u/s. 37(1) of the Act. The same view was followed by ITAT Pune Bench in the case of Sandvik Asia (supra). Respectfully ordinate Benches, we set aside the order of the Ld. CIT(A) and direct the AO to allow Therefore, in principle we agree with the contention of the red in favour of the assessee, but, we also agree the concern of the learned departmental representative that actual amount which is allowable to the assessee following the decision of the earlier years has not mployees concerned, who actually exercised the share option. In view of the above facts to the file of the Assessing Officer for allowing the claim of the assessee in of the quantum of no. 1 (one) of the appeal of the assessee is accordingly allowed for statistical to disallowance of ct read with Rule 8.1 The brief facts qua company made various mutual fund debt growth plan, shares of Indian companies being a strategic investment, investment in compulsorily convertible debenture and investment in partnership/Limited liability partnership. The contention of the assessee was that section 14A could not be made in the year where there is no dividend income, secondly the strategic investment, of the assessee. But according to t expenditure incurred for carrying out which were capable of earning exempted income, forming part of the total income section 14A of the A expenses towards activity of investment. According to the Assessing Officer some expenditure must have been incurred towards the investment activity. Further contention of the assessee and 14A is attracted even if no dividend income was earned during the relevant financial year. The learned disallowance under section 14A is attracted on both strategic investment and stock the Rules, he computed 1% of annual average investment at ₹7,52,91, M/s Avendus Capital Pvt. Ltd The brief facts qua the issue in dispute are that the assessee various kinds of investments, firstly mutual fund debt growth plan, Secondly, investment in equity shares of Indian companies being a strategic investment, investment in compulsorily convertible debenture and investment in partnership/Limited liability partnership. The contention of the assessee was that firstly, disallowance under could not be made in the year where there is no secondly, 14A disallowance was not attracted the strategic investment, thirdly, judicial decisions were in favour of the assessee. But according to the Assessing Officer, expenditure incurred for carrying out investment activity which were capable of earning exempted income, forming part of the total income, was liable for disallowance under A of the Act, but the assessee did not attribute any expenses towards activity of investment. According to the Assessing Officer some expenditure must have been incurred towards the . Further, The Assessing Officer rejected the contention of the assessee and held that disallowance under section 14A is attracted even if no dividend income was earned during the ant financial year. The learned Assessing Officer also held that disallowance under section 14A is attracted on both strategic and stock-in-trade. Thereafter, invoking rule 8D(2)(ii) of ules, he computed 1% of annual average 7,52,91,644/- and added the same for disallowance M/s Avendus Capital Pvt. Ltd 10 ITA No. 404/MUM/2025 the issue in dispute are that the assessee firstly, investment in investment in equity shares of Indian companies being a strategic investment, thirdly investment in compulsorily convertible debenture and fourthly investment in partnership/Limited liability partnership. The , disallowance under could not be made in the year where there is no , 14A disallowance was not attracted on judicial decisions were in favour he Assessing Officer, any activity in shares, which were capable of earning exempted income, though not r disallowance under assessee did not attribute any expenses towards activity of investment. According to the Assessing Officer some expenditure must have been incurred towards the , The Assessing Officer rejected the held that disallowance under section 14A is attracted even if no dividend income was earned during the Assessing Officer also held that disallowance under section 14A is attracted on both strategic invoking rule 8D(2)(ii) of ules, he computed 1% of annual average of monthly and added the same for disallowance under section 14A of the A following the decision International Airport Private Limited (2022) 143 taxmann.com 209 (SC) held that where the assessee did not have exempt income, no disallowance under section 14A read with rule and the could be made. He also referred to the decision of Hon’ble Supreme Court in the case of PCIT Vs Oil Industry development Board 103 taxmann.com 326. Accordingly 9. We have heard rival submission of the parties and perused the relevant material on record. Befo assessee referred to the decision of the of the assessee in ITA No.1738 and 1739/Mum/2023 for assessment year 2016 wherein also the Tribunal has deleted the exempt income earned. The relevant finding of the reproduced as under: “7. Heard both the sides and perused the material on record. The Id. Counsel has contended that assesse has not earned any exempt income during the Delhi High Court in the case of Chem Investment Ltd. Vs. CIT (2015) 61 taxman.com 18 (Del) held that provision of Sec. 14A will not be applied in case no exempt income is received or receivable during the relevant prev High Court in the case of PCIT Vs. Era Infrastructure (I) Ltd. (ITA No. 204/2022) held that amendment made by Finance Act 2022 to Sec. 14A by inserting non take effect from 01.0 retrospective effect. Therefore, following the judicial findings as supra we delete the addition made by the assessing officer u/s 14A of the M/s Avendus Capital Pvt. Ltd A of the Act. On further appeal, the Ld. CIT(A) following the decision of Hon’ble Supreme Court in the case of International Airport Private Limited (2022) 143 taxmann.com held that where the assessee did not have exempt income, no disallowance under section 14A read with rule and the could be erred to the decision of Hon’ble Supreme Court in PCIT Vs Oil Industry development Board 103 . Accordingly, deleted the addition. We have heard rival submission of the parties and perused the relevant material on record. Before us the learned counsel for the assessee referred to the decision of the coordinate bench in the case of the assessee in ITA No.1738 and 1739/Mum/2023 for assessment year 2016-17 and 2017-18 passed on ribunal has deleted the addition in view of the exempt income earned. The relevant finding of the reproduced as under: 7. Heard both the sides and perused the material on record. The Id. Counsel has contended that assesse has not earned any exempt income during the year under consideration. The Hon'ble Delhi High Court in the case of Chem Investment Ltd. Vs. CIT (2015) 61 taxman.com 18 (Del) held that provision of Sec. 14A will not be applied in case no exempt income is received or receivable during the relevant previous year. We find that the Hon'ble Delhi High Court in the case of PCIT Vs. Era Infrastructure (I) Ltd. (ITA No. 204/2022) held that amendment made by Finance Act 2022 to Sec. 14A by inserting non-obstante clause and explanation will take effect from 01.04.2022 and cannot be presumed to have retrospective effect. Therefore, following the judicial findings as supra we delete the addition made by the assessing officer the Act.” M/s Avendus Capital Pvt. Ltd 11 ITA No. 404/MUM/2025 ct. On further appeal, the Ld. CIT(A) of Hon’ble Supreme Court in the case of Delhi International Airport Private Limited (2022) 143 taxmann.com held that where the assessee did not have exempt income, no disallowance under section 14A read with rule and the could be erred to the decision of Hon’ble Supreme Court in PCIT Vs Oil Industry development Board 103 deleted the addition. We have heard rival submission of the parties and perused the re us the learned counsel for the coordinate bench in the case of the assessee in ITA No.1738 and 1739/Mum/2023 for on 10/08/2023, addition in view of the exempt income earned. The relevant finding of the Tribunal is 7. Heard both the sides and perused the material on record. The Id. Counsel has contended that assesse has not earned any year under consideration. The Hon'ble Delhi High Court in the case of Chem Investment Ltd. Vs. CIT (2015) 61 taxman.com 18 (Del) held that provision of Sec. 14A will not be applied in case no exempt income is received or receivable ious year. We find that the Hon'ble Delhi High Court in the case of PCIT Vs. Era Infrastructure (I) Ltd. (ITA No. 204/2022) held that amendment made by Finance Act 2022 to obstante clause and explanation will 4.2022 and cannot be presumed to have retrospective effect. Therefore, following the judicial findings as supra we delete the addition made by the assessing officer 9.1 Further, we find that the Ld. CIT(A) has followed the finding of the Hon’ble Supreme Court in the case of Delhi International Airport Private Limited(supra) and Oil Industry development Board(supra), therefore we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly the same. The ground No accordingly dismissed. 10. The ground no. 5 of the appeal of the revenue related to the corporate social responsibility (CSR) expenses claimed by way of deduction under section 80G but disa Officer. 10.1 The brief facts qua the issue in dispute are that assessee debited some of ₹1,38,00, deduction of the same of the section 80G of the A claim of CSR expenses have been specifically prohibited under the provisions of section 37 of the allowed under the provisions of section 80 Assessing Officer held that donation of voluntary nature are entitled for deduction whereas incurring of CSR expenses the Companies Act 2013 the claim of the asse M/s Avendus Capital Pvt. Ltd we find that the Ld. CIT(A) has followed the finding of the Hon’ble Supreme Court in the case of Delhi International Airport Private Limited(supra) and Oil Industry development Board(supra), therefore we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly the same. The ground Nos. 2 to 4 of the appeal of the Revenue accordingly dismissed. The ground no. 5 of the appeal of the revenue related to the corporate social responsibility (CSR) expenses claimed by way of deduction under section 80G but disallowed by the Assessing The brief facts qua the issue in dispute are that assessee 1,38,00,000/- being CSR expenses but claimed deduction of the same to the extent of the 50% under t G of the Act. According to the Assessing Officer claim of CSR expenses have been specifically prohibited under the provisions of section 37 of the Act, therefore same cannot be er the provisions of section 80G of the Assessing Officer held that under the provisions of section 80 donation of voluntary nature are entitled for deduction whereas incurring of CSR expenses was mandatory under the provisions of ct 2013. On further appeal, the Ld. CIT(A) allowed the claim of the assessee following the decisions of the C M/s Avendus Capital Pvt. Ltd 12 ITA No. 404/MUM/2025 we find that the Ld. CIT(A) has followed the finding of the Hon’ble Supreme Court in the case of Delhi International Airport Private Limited(supra) and Oil Industry development Board(supra), therefore we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the appeal of the Revenue are The ground no. 5 of the appeal of the revenue related to the corporate social responsibility (CSR) expenses claimed by way of llowed by the Assessing The brief facts qua the issue in dispute are that assessee being CSR expenses but claimed under the provisions t. According to the Assessing Officer claim of CSR expenses have been specifically prohibited under the , therefore same cannot be G of the Act. The er the provisions of section 80G only donation of voluntary nature are entitled for deduction whereas mandatory under the provisions of the Ld. CIT(A) allowed following the decisions of the Coordinate bench in the case of observing as under: “5.3.4 The issue in dispute is no longer res of CSR under the provision of section 80G is decided in th Motilal Oswal Securities Ltd in ITA No.1795/Mum/2023 dated 18.08.2023 by Hon’ble ITAT, ‘D’ Bench Mumbai as under: “9. The issue arising in ground no. (iv), raised in Revenue's appeal, is pertaining to the deletion of disallowance of deduction cl under section 80G of the Act on Corporate Social Responsibility (\"CSR\") expenses. 10. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the year under consideration, the assessee incurred CSR expenses of donation under section 80G of the Act amounting to Rs. 2,21,41,893. The assessee was asked to show cause as to why the claim of deduction under section 80G of the Act of Rs. 1,10,70,947, against the CSR expenses should not be order passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that the expenditure incurred by the assessee under the provisions of the Companies Act, 2013, cannot be claimed as a donation AO further held that the expenditure under the aforesaid provisions of the Companies Act, 2013 is a mandatory contribution and not a voluntary contribution and this expenditure has categorically been disallowed under secti the tax deduction is allowed on CSR expenses then this would result in subsidising the expenses by one Accordingly, the AO disallowed the deduction of Rs. 1,10,70,947, claim under section 80G of t income of the assessee. 11. The learned CIT(A), vide impugned order, allowed the ground raised by the assessee on this issue following the judicial precedents rendered by the coordinate benches of the Tribunal. Being aggrieved, the Revenue is in appeal before us. 12. We have considered the submissions of both sides and perused the material available on record. We find that the coordinate M/s Avendus Capital Pvt. Ltd bench in the case of Motilal Oswal Securities Ltd (supera) 5.3.4 The issue in dispute is no longer res-integra. The allowability of CSR under the provision of section 80G is decided in th Motilal Oswal Securities Ltd in ITA No.1795/Mum/2023 dated 18.08.2023 by Hon’ble ITAT, ‘D’ Bench Mumbai as under: “9. The issue arising in ground no. (iv), raised in Revenue's appeal, is pertaining to the deletion of disallowance of deduction cl under section 80G of the Act on Corporate Social Responsibility (\"CSR\") expenses. 10. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the year under consideration, the assessee incurred CSR expenses of Rs. 2,25,71,775, and claimed donation under section 80G of the Act amounting to Rs. 2,21,41,893. The assessee was asked to show cause as to why the claim of deduction under section 80G of the Act of Rs. 1,10,70,947, against the CSR expenses should not be disallowed. The AO vide order passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that the expenditure incurred by the assessee under the provisions of the Companies Act, 2013, cannot be claimed as a donation under section 80G of the Act. The AO further held that the expenditure under the aforesaid provisions of the Companies Act, 2013 is a mandatory contribution and not a voluntary contribution and this expenditure has categorically been disallowed under section 37 of the Act. The AO further held that if the tax deduction is allowed on CSR expenses then this would result in subsidising the expenses by one-third amount. Accordingly, the AO disallowed the deduction of Rs. 1,10,70,947, claim under section 80G of the Act and added the same to the total income of the assessee. 11. The learned CIT(A), vide impugned order, allowed the ground raised by the assessee on this issue following the judicial precedents rendered by the coordinate benches of the Tribunal. aggrieved, the Revenue is in appeal before us. 12. We have considered the submissions of both sides and perused the material available on record. We find that the coordinate M/s Avendus Capital Pvt. Ltd 13 ITA No. 404/MUM/2025 Motilal Oswal Securities Ltd (supera), integra. The allowability of CSR under the provision of section 80G is decided in the case of Motilal Oswal Securities Ltd in ITA No.1795/Mum/2023 dated 18.08.2023 by Hon’ble ITAT, ‘D’ Bench Mumbai as under: “9. The issue arising in ground no. (iv), raised in Revenue's appeal, is pertaining to the deletion of disallowance of deduction claimed under section 80G of the Act on Corporate Social Responsibility 10. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the year under consideration, the Rs. 2,25,71,775, and claimed donation under section 80G of the Act amounting to Rs. 2,21,41,893. The assessee was asked to show cause as to why the claim of deduction under section 80G of the Act of Rs. 1,10,70,947, disallowed. The AO vide order passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that the expenditure incurred by the assessee under the provisions of the Companies Act, 2013, under section 80G of the Act. The AO further held that the expenditure under the aforesaid provisions of the Companies Act, 2013 is a mandatory contribution and not a voluntary contribution and this expenditure has categorically been on 37 of the Act. The AO further held that if the tax deduction is allowed on CSR expenses then this would third amount. Accordingly, the AO disallowed the deduction of Rs. 1,10,70,947, he Act and added the same to the total 11. The learned CIT(A), vide impugned order, allowed the ground raised by the assessee on this issue following the judicial precedents rendered by the coordinate benches of the Tribunal. 12. We have considered the submissions of both sides and perused the material available on record. We find that the coordinate benches of the Tribunal have consistently taken the view in favour of the assess allowed under section 37 of the Act pursuant to insertion of Explanation-2 to section 37 vide Finance Act, 2014 with effect from 01/04/2015. However, the said expenditure is allowable under section 80G of t 5.3.5 Further in the case of Allegis Services (India) Pvt. Ltd. in ITA No. 1693/Bang/2019 dated 29.04.2020 by Hon’ble ITAT, Bangalore, wherein it was held that: “18. In present facts of case, Ld.AR submitted that all payments forming part of CSR computing Income under the head, “Income from Business and Profession”. It has been submitted that some payments forming part of CSR were claimed as deduction under section80G of the Act, for computing “To authorities below. In our view, benefit of claim under Chapter VI A, which is considered for computing ‘Total Taxable Income”. If assessee is denied this benefit, merely becaus double disallowance, which is not the intention of Legislature. 19. On the basis of above discussion, in our view, authorities below have erred in denying claim of assessee under section 80G of the Act. We also note that authorities below have not verified nature of payments qualifying exemption under section 80G of the Act and quantum of eligibility as per section 80G(1) of the Act. 20. Under such circumstances, we are remitting the issue back to Ld.AO for verifying conditions necessary to claim deduction under section 80G of the Act. Assessee is directed to file all requisite details in order to substantiate its claim before Ld.AO. Ld.AO is then directed to grant deduction to the extent of eligibility.” 5.3.5 Further, Hon’ble ITAT, Kolkata in the case of JMS Mining Pvt. Ltd. in [2021] 130 taxmann.com 118 (Kolkata “Since Parliament intended certain restrictions to only CSR expenditure in respect of two donations included by an assesse CSR expenditure i.e. [Swachh Bharat Kosh and Clean Ganga Fund] has impliedly not made any prohibition/restriction in respect of claim of CSR expenses in other cases if it is otherwise eligible under M/s Avendus Capital Pvt. Ltd benches of the Tribunal have consistently taken the view in favour of the assessee and held that the CSR expenses even though not allowed under section 37 of the Act pursuant to insertion of 2 to section 37 vide Finance Act, 2014 with effect from 01/04/2015. However, the said expenditure is allowable under section 80G of the Act.” 5.3.5 Further in the case of Allegis Services (India) Pvt. Ltd. in ITA No. 1693/Bang/2019 dated 29.04.2020 by Hon’ble ITAT, Bangalore, wherein it was held that: “18. In present facts of case, Ld.AR submitted that all payments forming part of CSR does not form part of profit and loss account for computing Income under the head, “Income from Business and Profession”. It has been submitted that some payments forming part of CSR were claimed as deduction under section80G of the Act, for computing “Total taxable income”, which has been disallowed by authorities below. In our view, assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing ‘Total Taxable Income”. If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature. 19. On the basis of above discussion, in our view, authorities below have erred in denying claim of assessee under section 80G of the lso note that authorities below have not verified nature of payments qualifying exemption under section 80G of the Act and quantum of eligibility as per section 80G(1) of the Act. 20. Under such circumstances, we are remitting the issue back to verifying conditions necessary to claim deduction under section 80G of the Act. Assessee is directed to file all requisite details in order to substantiate its claim before Ld.AO. Ld.AO is then directed to grant deduction to the extent of eligibility.” 3.5 Further, Hon’ble ITAT, Kolkata in the case of JMS Mining Pvt. Ltd. in [2021] 130 taxmann.com 118 (Kolkata - Trib.)held as under: “Since Parliament intended certain restrictions to only CSR expenditure in respect of two donations included by an assesse CSR expenditure i.e. [Swachh Bharat Kosh and Clean Ganga Fund] has impliedly not made any prohibition/restriction in respect of claim of CSR expenses in other cases if it is otherwise eligible under M/s Avendus Capital Pvt. Ltd 14 ITA No. 404/MUM/2025 benches of the Tribunal have consistently taken the view in favour ee and held that the CSR expenses even though not allowed under section 37 of the Act pursuant to insertion of 2 to section 37 vide Finance Act, 2014 with effect from 01/04/2015. However, the said expenditure is allowable under 5.3.5 Further in the case of Allegis Services (India) Pvt. Ltd. in ITA No. 1693/Bang/2019 dated 29.04.2020 by Hon’ble ITAT, “18. In present facts of case, Ld.AR submitted that all payments does not form part of profit and loss account for computing Income under the head, “Income from Business and Profession”. It has been submitted that some payments forming part of CSR were claimed as deduction under section80G of the Act, for tal taxable income”, which has been disallowed by assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing ‘Total Taxable Income”. If assessee is denied this benefit, e such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature. 19. On the basis of above discussion, in our view, authorities below have erred in denying claim of assessee under section 80G of the lso note that authorities below have not verified nature of payments qualifying exemption under section 80G of the Act and 20. Under such circumstances, we are remitting the issue back to verifying conditions necessary to claim deduction under section 80G of the Act. Assessee is directed to file all requisite details in order to substantiate its claim before Ld.AO. Ld.AO is then 3.5 Further, Hon’ble ITAT, Kolkata in the case of JMS Mining Pvt. Trib.)held as under: “Since Parliament intended certain restrictions to only CSR expenditure in respect of two donations included by an assessee as CSR expenditure i.e. [Swachh Bharat Kosh and Clean Ganga Fund] has impliedly not made any prohibition/restriction in respect of claim of CSR expenses in other cases if it is otherwise eligible under section 80G. In this context, it is found that the a donation by RTGS through bank which is received by Shree Charity Trust which was approved under section 80G(5)(vi). The assessee has also made payment to Pt. Jashraj Music Academy Trust which is also approved under section 80G(5)(vi) and c Director (Exemption) is found placed. Therefore, since the assessee satisfies the condition under section 80G of the donees, the assessee's claim for deduction of CSR expenses/contribution under section 80G was allowed after enquiry by Thus, the action of the Assessing Officer allowing the claim under section 80G is a plausible view.” 5.3.6 As the facts of the case identical to the cases decided by Hon’ble ITAT (supra), therefore, the AO is directed to allow the c of CSR in ITR subject to verification of donation forming part of CSR are eligible for deduction under the provision of section 80G of the Act. Accordingly, this ground of appeal is allowed. 11. We have heard rival submission of the parties and relevant material on record. We find that the Ld. CIT(A) has followed decision of the coordinate bench we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly No. 5(five) of the appeal of the 12. In result, the appeal of the statistical purpose. Order pronounced in the open Court on 06 Sd/- (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 06/03/2025 Rahul Sharma, Sr. P.S. M/s Avendus Capital Pvt. Ltd section 80G. In this context, it is found that the assessee has made donation by RTGS through bank which is received by Shree Charity Trust which was approved under section 80G(5)(vi). The assessee has also made payment to Pt. Jashraj Music Academy Trust which is also approved under section 80G(5)(vi) and certificate given by Director (Exemption) is found placed. Therefore, since the assessee satisfies the condition under section 80G of the donees, the assessee's claim for deduction of CSR expenses/contribution under section 80G was allowed after enquiry by the Assessing Officer. Thus, the action of the Assessing Officer allowing the claim under section 80G is a plausible view.” 5.3.6 As the facts of the case identical to the cases decided by Hon’ble ITAT (supra), therefore, the AO is directed to allow the c of CSR in ITR subject to verification of donation forming part of CSR are eligible for deduction under the provision of section 80G of the Act. Accordingly, this ground of appeal is allowed.” have heard rival submission of the parties and relevant material on record. We find that the Ld. CIT(A) has followed decision of the coordinate bench, which being a binding precedent, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same. The ground of the appeal of the Revenue is accordingly dismissed. In result, the appeal of the Revenue is allowed partly for ounced in the open Court on 06/03/2025. - Sd/ RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER M/s Avendus Capital Pvt. Ltd 15 ITA No. 404/MUM/2025 ssessee has made donation by RTGS through bank which is received by Shree Charity Trust which was approved under section 80G(5)(vi). The assessee has also made payment to Pt. Jashraj Music Academy Trust which ertificate given by Director (Exemption) is found placed. Therefore, since the assessee satisfies the condition under section 80G of the donees, the assessee's claim for deduction of CSR expenses/contribution under the Assessing Officer. Thus, the action of the Assessing Officer allowing the claim under 5.3.6 As the facts of the case identical to the cases decided by Hon’ble ITAT (supra), therefore, the AO is directed to allow the claim of CSR in ITR subject to verification of donation forming part of CSR are eligible for deduction under the provision of section 80G of the have heard rival submission of the parties and perused the relevant material on record. We find that the Ld. CIT(A) has followed which being a binding precedent, we do not find any infirmity in the order of the Ld. CIT(A) on the old the same. The ground is accordingly dismissed. is allowed partly for /03/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// M/s Avendus Capital Pvt. Ltd Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai M/s Avendus Capital Pvt. Ltd 16 ITA No. 404/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai "