Hindustan Tin Works Ltd. Vs DCIT (ITAT Delhi)
The Explanation -2 has been inserted below the section 37 (1) of the Act with effect from 01/04/2015 i.e. assessment year 2015-16. According to the said Explanation, corporate social responsibility expenditure incurred shall not be deemed to be incurred wholly and exclusively for the purpose of business or profession. This amendment being effective from assessment year 2015-16, is not applicable in the instant assessment year. Thus, respectfully following the order of the Tribunal (supra), we delete the addition in dispute in the year under consideration. The grounds of the appeal accordingly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against order dated 16/08/2017 passed by the learned CIT(Appeals)-35, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2014-15 raising following grounds:
1. That on the facts and in the circumstances of the case and in law the Learned Commissioner of Income Tax (Appeal) erred in dismissing the appeal of appellant company and retaining disallowance of Rs.4,82,677/-in the order passed by Ld. Deputy Commissioner of Income Tax Circle-n(2) New Delhi u/s 143(3) of the Income Tax Act, 1961.
2. That Ld. CIT (Appeal)-35 New Delhi grossly erred in law and on facts while sustaining a disallowance of Rs. 4,82,677/- treating a business expenditure debited under the head “Can-viroment Expenses A/c” as “Corporate Social responsibilities” expenditure.
3. That the order passed by the Ld. CIT (Appeal) New Delhi, being erroneous in law and on facts to the extent of aforesaid disallowance.
4. The appellant craves leave to add or amend any ground of appeal.
2. Briefly stated facts of the case are that the assessee was engaged in the business of manufacturing of Tin Cans/printed Lac sheets/components and trading in tinplate. For the year under consideration the assessee filed return of income on 30/09/2014 declaring total income of ₹ 11,54,33,330/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and complied with. The assessment under section 143(3) of the Act was completed on 30/11/2016 after making certain additions/disallowances. Aggrieved with the order of the Assessing Officer, the assessee filed appeal before the learned CIT(A) who partly allowed the appeal of the assessee. Aggrieved with the sustainence of disallowance of ₹ 4,82,677/- debited under the head “Canviroment Expenses Account”, the assessee is before the Tribunal, raising the grounds as reproduced above.
3. Before us, both the parties appeared through Videoconferencing facility. The learned counsel of the assessee submitted that issue in dispute is covered by the order of the Tribunal in assessment year 2012-13 and 2013-14 and, therefore, disallowance need to be deleted.
4. The learned DR, on the other hand, relied on the order of the lower authorities.
5. We have heard rival submission of the parties on the issue in dispute and perused the relevant orders of the lower authorities as well as the orders of the Tribunal. The assessee incurred following expenses under the head “Canviroment week expenses’:
