Donations made to political parties are allowable under IT Act subject to limit specified under Companies Act

August 13, 2014[2014] 47 taxmann.com 142 (Pune - Trib.)

IT : Where assessee's claim for set off of loss incurred in trading activities in commodities against other business income was rejected on ground that said transactions were sham, in view of fact that Assessing Officer did not furnish assessee any material of non-service of notice to various parties even when he had option for calling attendance of those parties in terms of section 131, impugned order was to be set aside and matter was to be remanded back for disposal afresh

IT : In terms of Explanation to section 80GGB, donation made by assessee-company to a political party was admissible as deduction subject to provisions of section 293A of Companies Act, 1956 which restricted quantum of such deduction equal to 5 per cent of average profits of three immediately preceding financial years of company