CSR Expenses Carried out by Hindustan Coca-Cola Beverages are Eligible for Deduction u/S 37(1) of the Income Tax Act: ITAT
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that Corporate Social Responsibility (CSR) expenses carried out by the Hindustan coca-cola beverages are eligible for deduction under Section 37(1) of the Income Tax Act 1961. Section 37(1) of the income tax act 1961 states that any expenses carried out by the assessee on corporate...
The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that Corporate Social Responsibility (CSR) expenses carried out by the Hindustan coca-cola beverages are eligible for deduction under Section 37(1) of the Income Tax Act 1961.
Section 37(1) of the income tax act 1961 states that any expenses carried out by the assessee on corporate social responsibility activities prescribed under section 135 of the companies Act, 2013 shall be considered for deduction and shall not be considered expenses incurred by the assessee for the objectives of the company.
Assessee Hindustan coca-cola is a manufacturer and trader of non alcoholic beverages and filed returns for respective years. The return were processed under section 1432() of the income tax act .Thereafter the assessing officer disallowed the CSR expenses incurred by the assessee for the assessment year 2004-05.Aggrieved assessee filed appeal before the CIT(A).The CIT(A) confirmed the disallowance. Further assessee filed second appeal before the Tribunal.
Neeraj Jain, Aditya Vohra advocates, and ArpitGoyal chartered accountant appeared for the assessee .Mohd. Gayasuddin Ansari appeared for revenue.
Counsel for the assessee submitted that the expenditure was incurred on activities like installation of handpumps, distribution of shoes, uniform etc. to school students, drought relief measures
Counsel for the revenue submitted that “Explanation 2 to Section 37(1) of the Act inserted by the Finance Act, 2014, with effect from 01.04.2015 observed the same to be clarificatory in nature and made applicable to Assessment year. 2004-05.”
Accordingly the tribunal relied upon the decision of the CIT vs. Vatika Townships Pvt. Ltd observed that the explanation 2 to Section 37(1) of the Act is not retrospective. Therefore the division bench of N.K.Billaiya, (Accountant Member) and Anubhav Sharma, (Judicial Member) allowed the appeal in favor of the assessee.
To Read the full text of the Order CLICK HERE
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