TMI Blog2018 (12) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the expenditure incurred by assessee on account of ‘CSR’ as envisaged u/s. 135 of the Companies Act, 2013 need to be allowed as deduction. Therefore, the ‘CSR’ expenditure which the assessee company was obliged to discharge because it was a statutory obligation upon the assessee company so, the deduction should have been allowed as per the law in force for this assessment year and we direct the AO to allow the expenditure. - Decided in favour of assessee. - I.T.A. No. 2231/Kol/2017 - - - Dated:- 30-11-2018 - Shri J. Sudhakar Reddy, AM Shri A. T. Varkey, JM For the Appellant : Shri Amitava Bose, Advocate For the Respondent : Shri Robin Choudhury, Addl. CIT, Sr. DR ORDER PER SHRI A.T.VARKEY, JM T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of assessee's business . And since the assessee is in the business of development of housing projects, according to AO, the vocational training expenses cannot be said to be incurred for the purpose of assessee's business and the AO observed that the assessee could not substantiate the commercial benefits derived by incurring these expenses. Thereafter, the AO, was of the opinion that the CSR expenditure is not allowable as deduction u/s 37(1) of the Act. The AO further observed that Explanation 2 to section 37(1) of the Act is applicable from AY 2015-16 onwards in respect of CSR expenditure made by the assessee as per section 135 of Companies Act, 2013. According to AO, however, in the present case, since the vocational train ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of the Companies Act, 2013 was not doubted by the AO/Ld. CIT(A). However, the claim was disallowed only on the ground that the expenditure is not wholly and exclusively incurred for the purpose of the business the expenditure. The Ld. AR drew our attention to the coordinate Bench decision in ACIT Vs. Jindal Power Ltd. (ITAT Raipur) in ITA No.99/BLPR/2012 for AY 2008-09 dated 23.06.2016 wherein on similar facts and law, the Tribunal while allowing the expenditure under CSR held as under: ii) The concept of business is not static. It has evolved over a period of time to include within its fold the concrete expression of care and concern for the society at large and the locality in which business is located in particular. Being a good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bed rock that every human being is entitled to arrange his affairs by rely on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit: law looks forward not backward (iv) It may appear to be some kind of a dichotomy in the tax legislation but the well settled legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e former, the disallowance under Explanation 2 to Section 37(1) comes into play, but, as for latter, there is no such disabling provision as long as the expenses, even in discharge of corporate social responsibility on voluntary basis, can be said to be wholly and exclusively for the purposes of business . There is no dispute that the expenses in question are not incurred under the aforesaid statutory obligation. For this reason also, as also for the basic reason that the Explanation 2 to Section 37(1) comes into play with effect from 1st April 2015, we hold that the disabling provision of Explanation 2 to Section 37(1) does not apply on the facts of this case. 5. Respectfully following the ratio laid by the Coordinate bench of this T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
