Case Number: ITA 1681/DEL/2020
Appellant: Green Infra Corporate Solar Limited, Gurgaon
Respondent: ACIT Circle-10(2), New Delhi
Assessment Year: 2017-18
Result: Appeal partly allowed, addition of CSR expenses deleted
Case Filed on: 2020-10-13
Order Type: Final Tribunal Order
Date of Order: 2022-12-01
Pronounced on: 2022-12-01
This case involves Green Infra Corporate Solar Limited, Gurgaon, challenging the addition of Corporate Social Responsibility (CSR) expenses to its book profit for the assessment year 2017-18. The appeal was filed against the order of the Commissioner of Income Tax (Appeals), New Delhi, which confirmed the addition of CSR expenses under section 115JB of the Income-tax Act, 1961.
The primary issue in this case was whether CSR expenses should be added to the book profit while computing income under section 115JB of the Income-tax Act. The Assessing Officer had made an addition of Rs. 13,42,280 to the book profit on account of CSR expenses. Similar additions were made in related cases ITA 1680/DEL/2020 and ITA 1682/DEL/2020 involving Green Infra Solar Energy Limited and Green Infra BTV Limited respectively.
The appellant, represented by Mr. Biren V. Shah, CA, and Ms. Meena Mittal, CA, argued that there is no requirement under section 115JB to add CSR expenses to the book profit. The appellant cited the case of GE Power System India Private Limited vs. ACIT, where the ITAT Delhi had ruled in favor of excluding CSR expenses from book profit.
The respondent, represented by Mr. Harpal Singh Kharab, Senior Departmental Representative, did not provide any counterarguments that could persuade the tribunal to take a different view from the aforementioned case.
The tribunal, comprising Shri Kul Bharat, Judicial Member, and Shri Anadee Nath Misshra, Accountant Member, noted that the issue is covered by the order dated 10/08/2022 in the case of GE Power System India Private Limited vs. ACIT. In that case, the tribunal had ruled that CSR expenses should not be added to the book profit under section 115JB.
The tribunal agreed with the appellant’s arguments and held that the addition of CSR expenses to the book profit was not justified. Consequently, the tribunal directed the Assessing Officer to exclude the CSR expenses from the book profit for computing income under section 115JB.
The tribunal allowed the appeal filed by Green Infra Corporate Solar Limited, directing the deletion of the addition of CSR expenses to the book profit. However, the tribunal dismissed the grounds related to the initiation of penalty proceedings as premature, since no penalty order had been passed by the Assessing Officer.
The order was pronounced in the open court on 1st December 2022, bringing clarity on the treatment of CSR expenses under section 115JB for the assessment year 2017-18.
Order:
The appeal filed by Green Infra Corporate Solar Limited is partly allowed, with the addition of CSR expenses to the book profit being deleted.
Author: Accountant Member, Shri Anadee Nath Misshra
Date: 01.12.2022
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