Case Law Details
Synergia Lifesciences Pvt. Ltd Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that the claim for deduction under section 80G of the Income Tax Act in respect of Corporate Social Responsibility (CSR) expenses cannot be denied.
Facts- The assessee has incurred expenditure amounting to Rs.10,98,80,555, on account of donation in line with the guidelines issued under the Companies Act, 2013. Out of this payment, the assessee has claimed an amount of Rs.54,85,278, as a donation u/s. 80G of the Act, claiming a deduction to the extent of 50% of the donation. As per the assessee, there is no restriction imposed on claiming deduction u/s. 80G of the Act, even if the expenses have been incurred for the purpose of the Corporate Social Responsibility (“CSR”) activity, provided the payment is made to eligible entities as listed in section 80G of the Act. The assessee suo moto disallowed CSR expenses u/s. 37(1) of the Act, however, claimed deduction under section 80G of the Act.
AO did not agree with the submissions of the assessee and held that u/s. 80G the ‘sums paid’ need to be ‘donation’ for the purpose of being eligible for deduction under the said section. It was further held that the amount paid by the assessee should be voluntary to become eligible for deduction u/s. 80G of the Act. However, in the present case, the same was paid by the assessee as a mandatory requirement as per section 135 of the Companies Act, 2013. Accordingly, the AO disallowed the deduction claimed by the assessee u/s. 80G of the Act.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
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