The Income Tax Appellate Tribunal (ITAT), Mumbai bench has allowed the donations made to registered Trusts by company as CSR exepnses allowable under section 80G of the Income Tax Act, 1961.
The assessee, Acme Chem Limited, incurred CSR expenses of Rs. 35 lakh and the same was disallowed while computing the total income. The assessee gave donation of Rs. 20 lakh to Kisan Vikas Trust and Rs. 15 lakh to Howrah Maheswari Seva Trust, both are registered u/s 12A of the Act and also approved u/s 80G of the Act. While processing the return, the AO AO disallowed the said claim merely observing that no deduction is allowable for CSR expenses.
On second appeal, a bench of Sri Rajpal Yadav, Vice President & Dr. Manish Borad, Accountant Member allowed the claim observed that the assessee is eligible for deduction u/s 80G of the Act at Rs. 17.50 lakh.
“We fail to find any merit in this action of ld. AO which has been subsequently confirmed by ld. CIT(A) for the reason that CSR expenses incurred by the assessee already stand disallowed in the computation of income. Now, Section 80G of the Act comes into play if any of the donations is eligible for deduction u/s 80G of the Act. It is not in dispute before us that the organizations to which the alleged donation has been given are registered u/s 12A of the Act holds the approval of Section 80G of the Act. This Tribunal in the case of M/s. JMS Mining Pvt. Ltd. vs PCIT in ITA No. 146/KOL/2021 order dated 22.07.2021 has allowed the deduction u/s 80G of the Act on CSR expenses,” the Tribunal observed.
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