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2021 (10) TMI 495 - AT - Income TaxDisallowance on account of expenses incurred on corporate social responsibility - expenses has enhanced the brand image of the company which in turn has got a positive long-term impact on the business of the assessee - HELD THAT:- Expenses have been incurred on the direction of the relevant Ministry / Government of India - neither the AO nor the learned DR has rebutted the contention of the assessee that expenses have been incurred for enhancing brand image of the company which are wholly and exclusively for the purpose of the business of the assessee. Both the lower authorities have disallowed the expenses only on the ground that Explanation -2 is clarificatory and retrospective in nature - said Explanation -2 is prospective in nature, we hold that expenses incurred on corporate social responsibility in the year under consideration i.e. AY 2014-15, cannot be disallowed invoking Explanation-2 to section 37(1) of the Act. The ground of the appeal of the assessee is accordingly allowed.
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