Examine with reasons, the allowability of the following expenses incurred by Anand, a wholesale dealer of commodities, under the Income Tax Act, 1961 while computing profit and gains from business or profession for the A

Allowability of the expenses incurred by Mr. Anand, a wholesale dealer in commodities, while computing profits and gains from business or profession for AY 2022-23 are as under: (i) Construction of school building in compliance with CSR activities amounting to ₹5,70,000: As per provision of section 37(1) of the Income tax Act, 1961, expenditure not being in the nature of capital expenditure or personal expenses of an assessee and not covered under section 30 to 36 of the Income tax Act, 1961, and incurred wholly and exclusively for the purposes of the business is allowed as deduction while computing business income. However, any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to have been incurred for the purpose of business and, hence, shall not be allowed as deduction under section 37 of the Income tax Act, 1961. Accordingly, the amount of ₹5,70,000 incurred by Mr. Anand towards construction of school building in compliance with CSR activities shall not be allowed as deduction.