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TMI Blog2022 (6) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act or under any other provision for claiming deduction for CSR expenses. There are number of judicial precedents which have expressed the aforesaid view, some of these decisions have been cited before us by learned counsel for the assessee. Thus, prior to insertion of Explanation 2 to section 37(1) of the Act, w.e.f., 01.04.2014, as per settled legal position, it is an allowable expenditure under Section 37(1). A specific bar for allowing such expenditure u/s 37(1) of the Act was brought to the statue by Finance Act, 2014 effective from 01.04.2014. The amendment, no doubt, will apply prospectively. Thus, following the various judicial precedents cited before us, we hold that CSR expenses incurred by the assessee are allowable as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner (Appeals) in assessment year 2008-09 and 2009-10, assessee claim may be accepted. Appeal is allowed for statistical purposes. We direct the AO to examine the revised computation of disallowance under section 14A read with Rule 8D of the Act as filed by the assessee and if it is found similar to the methodology adopted by the assessee in assessment years 2008-09 and 2009- 10, which, as submitted, were accepted by the AO while giving effect to the orders of Commissioner (Appeals) in assessment year 2008-09 and 2009-10, assessee claim may be accepted. Needless to mention, assessee must be provided due opportunity of being heard before deciding the issue. This ground is allowed for statistical purposes. - ITA No.4856/Del/2018 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the expenditure being of capital in nature is not allowed. Accordingly, he disallowed the claim of the assessee. 5. Learned Commissioner (Appeals) upheld the disallowance on the ground that such expenditure is not incurred wholly and exclusively for the purpose of business. 6. Before us, learned counsel for the assessee submitted that in the preceding assessment years, the CSR expenses incurred by the assessee were allowed under section 37 of the Act. He submitted, in the impugned assessment year, based on Explanation 2 to section 37 of the Act, the Assessing Officer has disallowed the expenditure. He submitted, Explanation 2 to section 37 of the Act inserted by the Finance Act, 2014 would apply prospectively and not to the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed the aforesaid view, some of these decisions have been cited before us by learned counsel for the assessee. Thus, prior to insertion of Explanation 2 to section 37(1) of the Act, w.e.f., 01.04.2014, as per settled legal position, it is an allowable expenditure under Section 37(1). A specific bar for allowing such expenditure under section 37(1) of the Act was brought to the statue by Finance Act, 2014 effective from 01.04.2014. Therefore, the amendment, no doubt, will apply prospectively. Thus, following the various judicial precedents cited before us, we hold that CSR expenses incurred by the assessee are allowable as deduction under section 37(1) of the Act. This ground is allowed. 9. In ground no. 3.1 and 3.2, the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities while giving effect to the order of learned Commissioner (Appeals) in assessment years 2008-09 and 2009-10. Thus, he submitted, the Assessing Officer may be directed to work out the disallowance under Rule 8D(2)(iii) by following the methodology adopted in assessment years 2008-09 and 2009-10. 11. Learned departmental representative relied upon the observations of the Assessing Officer and learned Commissioner (Appeals). 12. We have considered rival submissions and perused the materials on record. Undisputedly, while computing the income in the return of income filed for the impugned assessment year, the assessee has suo motu disallowed an amount of Rs.3.50 crores under section 14A read with Rule 8D. However, in course of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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