2022 (6) TMI 681

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.... the assessee did not press ground nos. 1 and 4, accordingly, they are dismissed as not pressed. 4. In ground no. 2, the assessee has challenged disallowance of Corporate Social Responsibility (CSR) expenses of Rs.5329 lakhs. Briefly the facts are, the assessee is a public sector undertaking. For the assessment year under dispute, assessee filed its return of income on 30.09.2013 declaring total income of Rs.33,25,07,06,770/-. In course of assessment proceeding, the Assessing Officer noticed that the assessee has debited an amount of Rs.5329 lakhs to the profit and loss account towards CSR expenses. Noticing this, the Assessing Officer called upon the assessee to explain why the expenditure, being of capital nature, should not be disallo....

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.... considered rival submissions and perused the materials on record. Undisputedly, the departmental authorities have disallowed the CSR expenses, firstly, on the reasoning that it is of capital nature, and secondly, it is not incurred wholly and exclusively for the purpose of business. As per section 135 of the Companies Act, 2013, every company having net worth of Rs. 500/- crores or more, or turnover of Rs. 1000/- crores or more, or a net profit of Rs. 5 crores or more during the immediately preceding financial year has to spent a certain percentage out of their profit towards CSR activities. Prior to amendment to section 37(1) of the Act by the Finance Act, 2014 by insertion of Explanation - 2, CSR expenses were allowed as deduction under ....

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....ignored the revised computation of the assessee. Whereas, learned Commissioner (Appeals), though, accepted assessee's contention that the assessee can make a revised claim before the appellate authority, however, he ultimately held that the disallowance originally computed by the assessee while filing the return of income is correct, hence, needs no interference. Accordingly, he rejected assessee's revised claim. 10. Before us, learned counsel for the assessee submitted that by simply following the method prescribed under Rule 8D(2), the assessee has made disallowance at a much higher figure than the actual expenditure incurred for earning the exempt income. He submitted, in the revised computation, the assessee has correctly computed th....