Case Law Details
Sadhana Sahakari Bank Ltd Vs ACIT (ITAT Pune)
The Assessing Officer disallowed expense of Rs. 1,27,500 u/s 37(1) of Income Tax Act on finding that the said expenditure relates to some advertisements connected to demise / birthday greetings / congratulating some politicians, etc.
Ostensibly, the appellant has made expenditure of Rs.1,27,500/- towards payment to daily newspaper for death news of G.P Pardhan, birth day greetings of Mr. Ajit Pawar and Mr. Sharad Pawar and congratulating Mr. Ajit Pawar. The appellant has not demonstrated that how this advertisement on print media is for attracting more customers specially when these persons are not related to the banks. Further, during the assessment proceedings the appellant could not prove business expediency of such expenditure. The contention of the appellant that expenditure is every nominal does not lead to conclusion that expenditure is allowable. Moreover, the appellant has admitted during the assessment proceedings that business expediency of such expenditure cannot be substantiated.
Thus, the expenditure incurred on the birthday / victory day celebration qua the erection of Flexies of the politicians, is not an allowable expenditure u/s 37 of the Act.
Banks without rural branches or advances are also entitled to deduction u/s 36(1)(viia) in respect of provision for bad and doubtful debts
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