9911796707
TMI Blog2019 (11) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure amounting to Rs. 237.80,958/- on account of Corporate Social Responsibility ("CSR for short"). During appellate proceedings in Income Tax Appellate Tribunal ('ITAT, for short'), the following particulars were filed from the assessee's side: 1. Tribunal Order dated 29.11.2018 in ITA No. 4733/Del/2015, for 1-6 AY 2012-13 holding CSR expenditure are allowable till AY 2014-15 (inclusive) and allowing Bank Guarantee Commission. 2. Tribunal Order dated 27.04.2018 in ITA No. 5687/Del/2014, for 7-19 AY 2011-12 holding CSR expenditure are allowable till AY 2014-15 (Inclusive) and allowing Bank Guarantee Commission. 3. DPE Guidelines for CSR Expenditure to be mandatory by CPSUs. [C]. At the time of hearing before us, both sides (representatives of the assessee as well as Revenue) agreed that the issue in dispute regarding allowability of CSR expenses is squarely covered in favour of the assessee, in identical facts and circumstances, by aforesaid orders dated 27.4.2018 and 29.11.2018 passed by co-ordinate Benchs of ITAT in assessee's own case in ITA Nos. 5687/Del/2014 & 4733/Del/2015 respectively for Assessment Years 2011-12 and 2012-13 respectively. [D]. We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of section 37(1) is that expenditure should have been laid out wholly and exclusively for the purpose of the business. The nexus between the expenditure and the business, in connection which expenditure has been incurred, has to be established before the assessee gets entitled to deduction under section 37(1) of the Act. It is duty of the assessee to discharge its onus in respect of expenditure incurred but the assessee failed to establish that these expenses have been incurred for business purpose. 4.4 Further, the assessee admitted that these expenses have been incurred as per guidelines issued by the Bureau of Public Enterprises that companies should spend certain percentage of their profits to discharge their corporate social responsibility. The intention behind these guidelines issued by Bureau of Public Enterprises can be met by the company by spending certain amount out of its surplus profit after tax and it need to claim these expenses in the books of account as expenditure before determining of taxable profit. On the other hand, if the intention is to be claim tax deduction, the Income Tax Act also provides deductions such as under section 35 AC and section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned earlier, both sides have agreed before us at the time of hearing that the dispute regarding allowability of CSR expenses is covered in favour of the assessee by aforesaid orders dated 27.4.2018 and 29.11.2018 in assessee's own case, in identical facts and circumstances, in assessee's favour. Neither side has brought any distinguishable facts nor circumstances to our attention to persuade us to take a view different from the view take in the aforesaid orders dated 27.4.2018 and 29.11.2018 of coordinate Benches of ITAT, Delhi. The relevant portions from the aforesaid ITA Nos. 5687/Del/2014 & 4733/Del/2015 of Coordinate Benches of ITAT Delhi are reproduced as under:- ITA No. 5687/Del/2014 "7.1 Coming to ground no. 2 of the assessee's appeal which challenges the expenses incurred towards corporate social responsibility, we find that the Raipur Bench of ITAT in the case of ACIT vs. Jindal Power Ltd. In ITA No. 99/Del/2012 has allowed CSR expenses in assessment year 2008-09. The Raipur Bench has further held that Explanation (2) to section 37 of the Act, inserted by Finance Act, 2012 has been brought into the Statute w.e.f. 1.4.2013 and this amendment is prospective in natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that Explanation (2) to section 37 of the Act, inserted by Finance Act, 2012 has been brought into the Statute w.e.f. 1.4.2013 and this amendment is prospective in nature and accordingly prior to 1.4.2013, CSR expenses are revenue in nature and allowable. We have gone through the details of CSR expenditure incurred by the assessee during the year under consideration i.e. assessment year 2011-12 and we find that the expenses have been incurred in respect of tree plantation/environment protection, construction of Zoology Lab in Rourkela, construction of Special Wings for cerebral palsy children in Rourkela, medical camps in Sirsa village in Bhilai, development of Dongia Pond in a village near Bhilai, construction of Bus stop shed in the city of Rourkela, creating awareness against drug abuse in Bhilai, construction of road in Durgapur etc. besides other expenses incurred under the head. It is not in dispute that these expenses have been incurred and the only reason they were disallowed by the Assessing Officer and so confirmed by the Ld. Commissioner of Income Tax (A) was that this expenditure was not expended wholly or exclusively for the purpose of business of the assessee. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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