The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the Corporate Social Responsibility (CSR) expenses shall be excluded while computing book profit under section 115B of the Income Tax Act, 1961.
Before the ITAT, the appellant, M/s Green Infra Solar Energy Limited contended that the addition of CSR expenses to book profit, when there is no such requirement to adjust the same while computing book profit as per provisions of section 115JB of the Income Tax Act, 1961.
A division bench of the ITAT comprising Shri Kul Bharat, Judicial Member and Shri Anadee Nath Misshra, Accountant Member observed that “Neither side has brought any facts and circumstances or legal submissions or decided precedents or any other materials for our consideration, to persuade us to take a view different from the view taken in the aforesaid order dated 10/08/2022 in the case of GE Power System India Pvt. Ltd. (supra) by Co-ordinate Bench of ITAT, Delhi. In view of the foregoing, and respectfully following the aforesaid order dated 10/08/2022 of Co-ordinate Bench of ITAT, Delhi in the case of GE Power System India Private Ltd. (supra), we decide the issue in favour of the assessee and against Revenue. Accordingly, Ground No.1 in all the three appeals before us is hereby allowed. The Assessing Officer is directed to exclude the CSR expenses to book profit for the purpose of computing book profit u/s 115JB of Income Tax Act.”
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