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TMI Blog2018 (5) TMI 1720X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 21-3-2018 - Shri H. S. Sidhu, Judicial Member And Shri Prashant Maharishi, Accountant Member Appellant by : Sh. H. P. Aggarwal, CA Sh. Y K Maghan, CA Respondent by : Sh. Sanjit Singh, CIT DR ORDER Per Prashant Maharishi, Accountant Member 1. This appeal is filed by assessee, against the order of the Commissioner of Income Tax (Appeals)-XI, New Delhi for A. Y. 2010-11 wherein the disallowance made by the Ld. Assessing Officer of ₹ 72,28,051/- on account of Corporate Social Responsibility Expenses was confirmed. 2. The assessee preferred the following grounds of appeal :- (i) That the order of the learned Commissioner of Income Tax (Appeals) is bad both on law and facts. (ii) That the learned Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society. In MoU guidelines, CSR was included as a compulsory element and require every CPSE to make a budgetary allocation for CSR activities, being some specified percentage of Profit after Tax of previous year, with the approval of its Board of Directors. The learned authority has erred in taking the view that expense under the head Corporate Social responsibility' is not incurred by the appellant in connection with the business of the appellant and thus cannot be treated as revenue expenditure u/s 37 of the Income Tax Act. The action of the learned authority is not based merely on hypothecation, conjectures, and sumerise. (iii) That the order of the learned Commissioner of Income Tax (Appeals) is bad on law in as far as su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable w.e.f. 01.04.2015. Further he confirmed the disallowance holding that as assessee has not given that how the requirement of section 37 is fulfilled. Therefore, assessee is in appeal before us. 5. The Ld. AR submitted that assessee is a company and it has incurred these expenditure in the vicinity of the places where assesseess units are located. Therefore, such expenditure were incurred with dominant object of welfare of its employees. He further submitted that the expenditure for construction of hospital, providing ambulance, repairs of schools etc are covered u/s 37 (1) of the Act. He therefore, submitted that this expenditure is allowable to the assessee. On the introduction of the explanation (2), he supported order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are required to be examined firstly from the fact that whether these expenditure have been laid out or expended by the assessee wholly and exclusively for the purposes of its business or not. Neither the Ld. Assessing Officer nor Ld. CIT (Appeals) has examined the expenses from this angel. Furthermore explanation (2) section 37 (1) of the Act, introduced by the finance No. 2 of 2014 is stated to be effective from 01.04.2015 i.e. from A. Y. 2015-16 only. Therefore, for the present A. Y. i.e. 2010-11 no disallowance this explanation to section 37(1) can be made. In view of the above facts the whole issue is set aside to the file of Ld. Assessing Officer with direction to examine the nature of these expenditure and decide whether same are al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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