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2019 (2) TMI 40 - AT - Income TaxRevision u/s 263 - allowability of Corporate Social Responsibility (CSR) expenditure - Held that:- Section 37 has been amended to clarify that for the purposes of sub-section (1) of section 37 any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to have been incurred for the purpose of business and hence shall not be allowed as deduction under said section 37. However, the CSR expenditure which is of the nature described in section 30 to section 36 of the Act shall be allowed as deduction under those sections subject to fulfillment of conditions, if any, specified therein. But this amendment takes effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years. The relevant assessment year before us is 2013-14 and hence this amendment will not apply to this case of assessee’s case. Respectfully following the principle laid down by the Hon’ble Supreme Court in the case of Vatika Township (P.) Ltd. [2014 (9) TMI 576 - SUPREME COURT] we hold that the ammendment brought out in section 37(1) by inserting explanation 2 by Finance (No. 2) Act, 2014 w.e.f. 01.04.2015 is prospective and assessee’s assessment year being 2013-14 will not apply and hence, revision proceedings of CIT is without any basis and quashed. - Appeal of assessee is allowed.
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