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| The Tax Publishers2019 TaxPub(DT) 1977 (Del-Trib) : (2019) 175 ITD 0601 INCOME TAX ACT 1961
Section 37(1)
Explanation 2 inserted in section 37(1) with effect from 1-4-2015 is prospective in nature, therefore, allowability of expenses incurred towards corporate social responsibility prior to 1-04-2015 would not get affected.
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Business expenditure - Expenses incurred to corporate social Responsibility - Allowability -
Assessee was a public sector undertaking which was established to promote and develop skill India through cottage and small industries. Assessee claimed expenses under head 'corporate social responsibilities'. AO disallowed the same on the allegation that by virtue of Explanation 2 inserted by Finance Act (No. 2) 2014 expenses incurred towards corporate social responsibility (CSR) were not allowed. Held: Explanation 2 inserted in section 37(1) with effect from 1-4-2015 is prospective in nature. Amendment by way of Explanation 2 to section 37(1) cannot be construed as disadvantage to the assessee in the period prior to the amendment. Thus, this amendment would not affect allowability of expenses for the year under consideration, being assessment year 2012-13.
Followed:CIT v. Vatika Township (P.) Ltd. (2014) 367 ITR 466 (SC) : 2014 TaxPub(DT) 3934 (SC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2012-13
IN THE ITAT, DELHI 'B' BENCH
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