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TMI Blog2020 (5) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... come- tax (Appeals) ("CIT(A)"), is bad in law and is liable to be set aside. 2.That the Assessing Officer ("AO")/CIT(A) erred in denying the deduction of Rs. 90,81,516/- claimed by the Appellant under Section 80G of the Income-tax Act ("the Act"). 3 That the AO/CIT(A) failed to appreciate the fact that no restriction is imposed on claiming deduction under Section 80G of the Act provided the payment is made to eligible entities listed in Section 80G of the Act. 4. That the AO/CIT(A) failed to appreciate the fact that the obligations to incur expenditure on CSR activities flows from the Companies Act, 2013 which has no linkage with Section 80G of the Act. 5.That the AO erred in levying interest under Section 234C of the Act. 6.That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. 5. Aggrieved by addition made by Ld.AO, assessee preferred appeal before Ld.CIT (A). Ld.CIT (A) was of the opinion that sum paid need to be donation for the purpose of being eligible for deduction under section 80 G of the Act. He was of the opinion that, sum paid by assessee was not voluntary, which is an essential element to treat the amount to be donation. The disallowance made by Ld.AO was thus upheld. 6. Aggrieved by order of Ld.CIT (A), assessee is in appeal before us now. 7. Ld.AR submitted that all grounds raised are in connection to disallowing donation under section 80 G of the Act by holding it to be CSR expenses. 8. She submitted that sum of Rs. 1,81,63,031/- is debited to profit and loss account under schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es with CSR obligations, with effect from 01/04/2014. Finance (No.2) Act, 2014 inserted new Explanation 2 to subsection (1) of section 37, so as to clarify that for purposes of subsection (1) of section 37, 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. 12. This amendment will take effect from 1/04/2015 and will, accordingly, apply to assessment year 2015-16 and subsequent years. 13. Thus, CSR expenditure is to be disallowed by new Explanation 2 to section 37(1), while computing Income under the Head 'Income form Busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the head, 'Income from Business and Profession" to those, who pursue corporate social responsibility projects under following sections. * Section 30 provides deduction on repairs, municipal tax and insurance premiums. * Section 31, provides deduction on repairs and insurance of plant, machinery and furniture * Section 32 provides for depreciation on tangible assets like building, machinery, plant, furniture and also on intangible assets like know-how, patents, trademarks, licenses. * Section 33 allows development rebate on machinery, plants and ships. * Section 34 states conditions for depreciation and development rebate. * Section 35 grants deduction on expenditure for scientific research and knowledge extension in natural and ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Profession", where as monies spent under section 80G are claimed while computing "Total Taxable income" in the hands of assessee. The point of claim under these provisions are different. 16. Further, intention of legislature is very clear and unambiguous, since expenditure incurred under section 30 to 36 are excluded from Explanation 2 to section 37(1) of the Act, they are specifically excluded in clarification issued. There is no restriction on an expenditure being claimed under above sections to be exempt, as long as it satisfies necessary conditions under section 30 to 36 of the Act, for computing income under the head, "Income from Business and Profession". 17. For claiming benefit under section 80G, deductions are considered at the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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