TaxTMI 
TaxTMI 
2019 (2) TMI 1538
X X X X Extracts X X X X
X X X X Extracts X X X X
....lity (CSR for short) expenses of Rs. 89.74 lacs - incurred under the directions of DPE Govt, of India requiring Companies to spend a prescribed percentage of its profits on CSR - and now also made mandatory under the Companies Act. 1.2. The learned CIT has erred in confirming the non consideration of alternate claim under Sections 35AC, 80G and other applicable provisions of the Income Tax Act. 1.3. The Authorities below have been influenced by Explanations u/s 37 of the Act inserted with regard to Companies Act 2013. 2. That the tax demanded is wrong. 3. That the above grounds are independent and without prejudice to each other. 4. That the appellant seeks leave to add, amend, alter or abandon a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....view of section 2 (15) of the Act, which also qualifies for deduction under section 35 AC and 80 G of the Act. He submitted that guidelines provided that CSR budget should be 0.5% to 2% of net profit during the year. Ld.Counsel submitted that expenses incurred by asessee are towards skill development and training of these sections which is ultimate objective of assessee. Ld.Counsel placed reliance upon manner in which such expenses has been incurred by assessee, which were debited to CSR expenses, details of which are as under: Mission Education- provided education among underprivileged children particularly in urban slum areas & Health care camps for urban slums specially children & women through smile foundation, New Delhi Rs. 30,89....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by both sides in the light of the records placed before us 6. Apart from arguing for allowability of expenses, assessee before us raised alternative plea, that these expenses may be allowed under section 35 AC and 80 G of the Act. 6.1. It is observed that assessee is a public sector undertaking which was established to promote and develop skill India through cottage and small industries. It has been submitted that in order to promote skill amongst poor class of the society, assessee established technical centres at various places and also carved out purposeful technical training programmes through NGOs which were involved in such activities at various places. Assessee has submitted that it has expended towards education of children....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... deductible under section 37 (1), by virtue of Explanation 2 inserted by Finance Act (No. 2) 2014. It is observed that Ld. AO/CIT (A) proceeded to make addition on the premises that Explanation 2 to section 37(1) was applicable to the present year under consideration. 7. We are unable to agree with plea advanced by Ld.Sr.DR. In our opinion Explanation 2 has been inserted in the section 37 (1) w.e.f. 01/04/15 and is prospective in nature. In our considered opinion amendment by way of Explanation 2 to Sec.37(1) cannot be construed as disadvantage to the assessee in the period prior to the amendment. It is a disabling provision, as set out in Explanation 2 to Sec.37(1), and refers to such Corporate Social Responsibility expenses u/s 135 of ....