TaxTMI 
TaxTMI 
2020 (5) TMI 378
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....w, Allegis Services (India) Private Limited ("Allegis India" or "the Company" or "the Appellant") respectfully craves, leave to prefer an appeal under Section 253 of the Income-tax Act, 1961 ("the Act") against the order passed by the Commissioner of Income Tax (Appeals) - 1, Bangalore ["the CIT(A)"] dated 27 May 2019, on the following grounds: 1.The learned CIT(A) has erred, in fact and law, by not allowing the eligible deduction of donation amounting to INR 8.40.000 in accordance with section 80G of the Act. 2.The learned CIT(A) has erred. in fact and law, by holding that the donation paid by the Appellant forms part of the mandatory requirement of the Companies Act 2013 and consequently not eligible for deduction under ....
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.... of the Act. Ld. CIT(A) opined that sum paid by assessee was not voluntary which is an essential element to treat the amount as donation. The disallowance made by Ld.AO was therefore upheld. 5. Aggrieved by order of Ld.CIT (A), assessee is in appeal before us now. 6. Ld.AR submitted that all grounds raised are in connection to disallowance of donation under section 80 G of the Act by holding it to be CSR expenses. 7. He submitted that out of total CSR expenses, sum amounting to Rs. 16,80,000/- was eligible for deduction under section 80G of the Act. It has been submitted that, donations made u/s 80G are eligible expenditure under section 80G of the Act, and cannot be denied to assessee for purpose of computing taxable income in the....
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.... 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. 11. This amendment will take effect from 1/04/2015 and will, accordingly, apply to assessment year 2015-16 and subsequent years. 12. Thus, CSR expenditure is to be disallowed by new Explanation 2 to section 37(1), while computing Income under the Head 'Income form Business and Profession'. Further, clarification regarding impact of Explanation 2 to section 37(1) of the Income Tax Act in Explanatory Memorandum to The Finance (No.2) Bill, 2014 is as under: "The existing provisions of section 37(1) of the Act provide that deduction for any expenditure, which is not mentioned....
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....t, 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 applied sciences under agriculture, animal husbandry and fisheries. Payment to approved universities/research institutions or company also qualifies for deduction. In-house R&D is eligible for deduction, under this section. * Section 35CCD p....
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....ion 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". 16. For claiming benefit under section 80G, deductions are considered at the stage of computing "Total taxable income". Even if any payments under section 80G forms part of CSR payments( keeping in mind ineligible deduction expressly provided u/s.80G), the same would already stand e....