The Division bench of the Delhi High Court allowed corporate social responsibility deduction to steal authority of India under section 37(1) of Income Tax Act 1961.
The aforesaid decision has been made by the corem of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju of Delhi High court in an appeal filed by the Pr. Commissioner Of Income Tax- against the order of Income tax Appellate Tribunal (ITAT).
Assessee Steel Authority of India Ltd is a Public Sector Undertaking (PSU) filed the appeal before ITAT against the order of assessing officer that disallowing the deduction claimed under section 37(1) of Income Tax Act 1961.After considering the averments of the both parties ITAT allowed the deduction claimed under section 37(1) Income Tax Act 1961.against the order the revenue filed appeal before Delhi High court
Puneet Rai, Counsel for the petitioner/revenue submits that the deduction under corporate social responsibility was in the nature of capital expenditure.
Vidhi Gupta counsel for the respondent/assesses the expense incurred as not being in the nature of capital expenses. Further CSR activities are mandated by Department of Public Enterprises. The mandate by Govt. Of India did not in itself could be taken as the reason for incurring the expenditure wholly and exclusively for business purpose.
The division bench of the Delhi high court held that CSR expenses had been allowed as deductible expenditure under Section 37(1) of the Income Tax Act 1961.and upheld the decision of the ITAT.
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