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Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per Anikesh Banerjee, JM:
Both the instant appeals are filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), Panaji-1 for Assessment Year 2013-14 & 2014-15. Both the cases are identical and having separate orders that were passed u/s 250(6) of the Income Tax Act 1961 [in brevity the Act] arising out from the order of the Ld. Income Tax Officer, Ward-4, Margao –Goa [in brevity the AO] passed u/s 143(3) of the Income Tax Act, 1961. Both the cases are the all the cases are identical. We, therefore, treat the assessee’s appeal in for assessment year 2013-14 as the lead case.
Brief fact of the case is that the assessee paid amount of Rs. 1,32,000/-, CSR expenses and claimed in the profit and loss account in the respective year. The Ld. AO asked to explain the issue. But the assessee was unable to do. Accordingly, the Ld. AO added back the expenses with the total income of the assessee. Aggrieved, the assessee filed an appeal before the Ld. CIT(A). The appellate authority upheld the order of the Ld. AO. Being, aggrieved the assessee filed an appeal before us.
The Ld. counsel of the assessee filed a paper book and written submission which are kept in the record. The Ld. Counsel further mentioned that they paid amount for charitable work which is recommended under the CSR activity. The said expense is eligible for the claim of deduction u/s 37 of the Act. Accordingly, the Ld. counsel filed an order of the Coordinated Bench at ITAT Raipur in the case of ACIT v. Jindal Power Ltd. [2016] 179 TTJ 736 (Raipur).
On the other hand, the ld. DR argued and relied on the order of the Ld. CIT(A) in page no. 7 of the impugned order. The relevant part of the order of the Ld. CIT(A) is extracted as follows:
3 Automobile Corp. of Goa Ltd v. ITO “7. The appellants incurred during the year, expenses of Rs .1,32,000-/ in relation to Laptops given to Meritorious students of Bhumika Higher Secondary School in the vicinity where the company is located .The appellant has claimed this as expenses under the head CSR expenses. This expenditure is claimed to be as per the CSR policy the company has always followed as corporate citizen fulfilling the dual requirements of shareholder return and societal welfare. The appellant has argued that the amendment to sec. 37 is applicable for A.Y 2015-16 onwards. Therefore, it is claimed that the CSR expenditure up to A.Y 2015-16 is allowable expenditure.
The Appellant submits that the above expense is incurred for the purpose of its business and is therefore allowable as business expenditure. I have considered the details and the submissions made by the appellant. From the point of view of the society the appellant has definitely done good work. However, I do not find any evidence that expenditure on the distribution of Laptops is incurred for the purpose of business. Thus, even before the amendment to sec. 37 the same is held to be not incurred for the purpose of business. Considering this the addition is confirmed. This ground is accordingly dismissed.”
We heard the rival submissions and relied on the order of Ld. CIT(A). Both the revenue authorities had placed that the assessee was unable to produce the relevant documents before them, in relation to claim u/s 37 for CSR expenditure.
Further in Ld. CIT(A) mentioned that out of claim of total expenses of Rs.16,28,989/- pertained to financial year 2012-13. This is one year prior to the year under consideration besides being the CSR expenses. Thus, also pertains to an earlier year and are therefore prior period expenses, so the amount of Rs. 16,29,989/- is disallowed in the reason of prior period expenses. But the balance expenses of Rs.3,30,603/- was disallowed due to lack of documentation. The Ld. counsel during the appellate proceedings filed the detailed documents in paper book which is from page nos. 1 to 22. Considering the above assessee is also directed to produce all the relevant documents for sustaining the claim for payment u/s 37 for CSR activities for both the years. The assessee should also allow the reasonable opportunity for its case.
In the result, the assessee’s appeal no. 424 & 425/PAN/2018 are allowed for statistical purposes.