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2019 (2) TMI 1346 - AT - Income TaxDisallowance of claim of CSR and SD expenses - allowable expenses u/s 37(1) - HELD THAT:- AO disallowed the above expenditure applying the provision of explanation 2 to section 37(1) of the Act which has been introduced w.e.f. 01.04.2015. The decision cited by the ld AR M/S. HLL LIFECARE LIMITEDC/O. K. VENKATACHALAM AIYER AND CO. CHARTERED ACCOUNTANTS VERSUS THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 1 (1) , TRIVANDRUM [2018 (6) TMI 552 - ITAT COCHIN] clearly covers the issue in favour of the assessee that the explanation 2 introduced w.e.f. 01.04.2015 applies from Assessment Year 2015-16 only. The ld DR could not produced any contrary decision wherein, it has been held that above explanation applies with retrospective effect. Therefore, we hold that for AY 2013- 14 CSR expenditure cannot be disallowed by invoking the explanation 2 to section 37(1) of the Act. In view of this we reverse the order of the lower authorities and direct the ld AO to delete the disallowance of CSR expenses and sustainable development expenses - Decided in favour of assessee.
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