Case Law Details
DCIT Vs GMR Warora Energy Ltd. (ITAT Mumbai)
ITAT Mumbai held that expenditure incurred on community development/CSR are allowable under section 37(1) of the Income Tax Act.
Facts- The assessee is a company engaged in the business of power generation and has commenced commercial operation of Unit-1 in the financial year 2012-13 and Unit-2 in the financial year 2013-14. During the year under consideration, the assessee filed its return of income on 30/11/2014, declaring a total income at Rs. nil. During the year, the assessee declared a loss of Rs.1400,05,73,040, under normal provisions, and a book loss of Rs.5,62,64,62,047, u/s. 115JB of the Act.
During the assessment proceedings, on perusal of the profit and loss account, it was observed that the assessee has claimed expenses of Rs.2,43,98,882, towards community development expenses under the head “other expenses”. AO not agreeing with the submissions of the assessee and held that expenditure is not incurred wholly and exclusively for the purpose of business.
CIT(A) allowed the appeal filed by the assessee and deleted the addition made by the AO on this issue. Being aggrieved, the Revenue is in appeal before us.
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