2018 (6) TMI 893

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....he present case is a company which is engaged in the business of mining, processing and export of chrome ore and manufacturing and export of ferro alloys. The return of income for the year under consideration was filed by it on 01.03.2014 declaring a total income of Rs. 34,78,59,899/-. In the said return, expenses incurred on peripheral development amounting to Rs. 36,92,842/- were claimed by the assessee as deduction. In this regard, it was explained on behalf of the assessee before the A.O. that as per the Companies Act, the companies with a net worth of more than Rs. 500 crore or revenue of more than Rs. 1000 crore or net profit of more than 5 crore are required to spent 2% of their average net profit of the preceding 3 years on Corporat....

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....ral development. 3. The disallowance made by the A.O. on account of peripheral development expenses was challenged by the assessee in the appeal filed before the Ld. CIT(A). During the course of appellate proceedings before the Ld. CIT(A), the following submissions were made on behalf of the assessee company in support of its claim for deduction on account of peripheral development expenses: "The view of the assessing officer that the peripheral development and CSR expenses to the tune of Rs. 21,73,311 incurred for the construction of school are capital in nature which is not correct. The said expenditure cannot be treated as capital in nature as the neither the ownership of the school belong to the company nor it has any contro....

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....not retrospective. Hence it does not apply in the assessment year 2013- 14. It is conclusion any expenditure incurred which not in the nature of personal or of capital in nature and incurred wholly and exclusively for the business purpose for the company to allowable under section 37(1) of the Companies Act." 4. Reliance was also placed by the assessee on decision of Raipur Bench of this Tribunal in the case of ACIT vs Jindal Power Ltd. rendered on June 21, 2016 wherein it was held that expenditure on corporate social responsibility though voluntary, was allowable as business expenditure for A.Y. 2008-09 and the Explanation 2 to Section 37(1) inserted with effect from 01.04.2015 was not retrospective. The Ld. CIT(A) did not find....