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TMI Blog2018 (1) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... unts to the institutions, which are engaged in medical treatment; school for mentally handicapped and education for poor and needy children. These itself prove that the expenditure incurred by the assessee are for charitable purposes. Hence, the deduction under section 37 is to be allowed. - Decided in favour of assessee The CIT(A) has referred to the amendment made in Finance Act (No.2) 2014 w.e.f. 1.4.2015 in Section 37, wherein, it is declared that for the purposes of sub-section(1) 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 be an expenditure incurred by the assessee for the purposes of the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the ld counsel for the assessee engaged to represent the case on behalf of the assessee will proceed to Mumbai for attending the part heard matters in Mumbai Benches and will not be available to argue the case. We find that the reason for adjournment is not plausible one, hence the adjournment petition is rejected and the matter is heard and disposed of on the basis of materials available on record and after hering ld D.R. 4. Apropos Ground No.1 of appeal, the facts are that the Assessing Officer found that the assessee has debited a sum of ₹ 94,51,165/- to the profit and loss account under the head Corporate Social Responsibility expenses . The Assessing Officer required the assessee to justify the claim. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same are not wholly and exclusively incurred for the business purposes of the assessee. Ld D.R. submitted that the assessee has not complied with the requisite conditions u/s.37(1) of the Act to claim the deduction. He also submitted that the assessee has not shown any nexus between the current benefit and figure benefit for the assessee in making such huge donations in the institutions. 7. We have heard ld D.R, perused the orders of lower authorities and materials available on record. We find the assessee has made donations to the respective institutes, such as Akanksha Lions School for mentally handicapped, Mikki Memorial Trust, a charitable institute for eye treatment, Sitapur Shiksha Sanstan, an institute for education of poor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of Hon ble Karnataka High Court in the case of CIT vs. Infosys Technologies Ltd., 360 ITR 714 (Kar) has held that the expenditure incurred on social responsibility was laid out or expended wholly and exclusively for purposes of business. The CIT(A) has referred to the amendment made in Finance Act (No.2) 2014 w.e.f. 1.4.2015 in Section 37, wherein, it is declared that for the purposes of sub-section(1) 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 be an expenditure incurred by the assessee for the purposes of the business or profession. The CIT(A) has held that there was no such embargo for the precedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Hira Steels Ltd., and Jagdamba Power and Alloys Ltd., and the interest amounting to ₹ 1,96,52,371/- attributable to the amount of investment of ₹ 16.37 crores has been added to the cost of improvement, thereby interest on borrowed fund of ₹ 1,96,52,371/- was not debited to profit and loss account. It was also submitted that by adding interest expenditure of ₹ 1,96,52,371/- to the cost of investment means reducing the interest expenditure by that amount resulting overall increase of the total income of the assessee, therefore, further disallowance on account of interest of ₹ 50,77,644/- is not correct. 12. The CIT(A) observed that interest on borrowed funds which is attributable to the investment in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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