Section 37

Section 37 General Deductions allowed for Business & Profession

Income Tax - According to Section 37 of the Income Tax Act, 1961, any expenditure not being the expenditure allowed under Sections 30 to 36 and not of capital or personal nature and which are expended exclusively for the purposes of the business or profession are allowed while computing the income from business or profession. Conditions laid out [&hel...

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General Deductions of Expenditure Under Section 37(1)

Income Tax - We know that there are five heads of income, in which income of any assessee has been taxed. There may be different types of income an assessee earned during previous year such as income from salary, House Property, Profit and gain from business or profession, Capital Gain and Income from other sources.  Section 28 is […]...

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Question of Deductibility of an Expenditure U/s. 57(iii) of Income Tax Act, 1961

Income Tax - The provisions of the Income-tax Act relating to allowances disclose that the expenditure or outgoing sought to be deducted should bear a character which has a connection with or relation to the particular activity which produces the income or constitutes its source....

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Analysis of expenses allowable under section 37 of Income Tax Act, 1961

Income Tax - CA Susheel Kumar Gupta Section 30 to 36 lists out certain deductions, which are allowed while computing the profit and gains from business or profession. Deductions under these sections are allowed subject to certain conditions mentioned in those section. Further, these sections do not list down all types of expenses. For these expenses, ...

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S. 37 Allowability of Business Expenditure & case laws

Income Tax - Condition for allowance under section 37 - Such expenditure should not be covered under the specific section i.e. sections 30 to 36. Expenditure should not be of capital nature. The expenditure should be incurred during the previous year. The expenditure should not be of personal nature. The expenditure should have been incurred wholly ...

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Allow deduction of Interest Paid to Government under Income Tax Act – ICAI

Income Tax - Allowability of Interest paid under Incometax Act, 1961: Presently, interest paid by the Government to an assessee is chargeable to tax. However, interest paid by the assessee to the Government under various sections is not allowed as deduction while computing the total income. Interest paid by the assessee is for the use of money by [&he...

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Non Contractual/ gratuitous Compensation to family of deceased employee allowable

DCIT Vs Adsun Offshore Diving Contractors Pvt. Ltd. (ITAT Mumbai) - DCIT Vs Adsun Offshore Diving Contractors Pvt. Ltd. (ITAT Mumbai) Given facts of the present case that whatever test may be applied in deciding whether any expenditure is allowable as a deduction under section 37, the essential requirement must in every case be as to whether the expenditure was eith...

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Public Issue expenses is capital expenditure & not allowable as revenue expense

Tatia Sky Line & Health Farms Ltd. Vs ACIT (Madras High Court) - Tatia Sky Line & Health Farms Ltd. Vs ACIT (Madras High Court) Conclusion: Expenses incurred by assessee for Public Issue was not allowable as revenue expenditure as assessee miserably failed to establish the tenability and truthfulness of its claim that the expenditure was revenue in nature. He...

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HC allows expense on Foreign Education & Training of Partner related to Business who continued after education

Aswathanarayana & Eswara Vs DCIT (Madras High Court) - Aswathanarayana & Eswara Vs DCIT (Madras High Court) We have examined the facts placed before the lower authorities and we find that the assessee is a partnership firm consisting of two brothers, two sons of one brother. All the four partners are duly qualified Engineers (B.E.) and the firm is c...

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No section 37 addition for expenses not claimed by Assessee

USG Buildwell Pvt. Ltd. Vs Additional CIT (ITAT Delhi) - USG Buildwell Pvt. Ltd. Vs Additional CIT (ITAT Delhi) The Ld. DR submitted that the disallowance u/s 37 on account of additional payment for purchase of land was righty made as the assessee could not establish his case as the expenditure was incurred without any substantial evidence produced before...

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Staff Recruitment Expenses exclusively for the business are allowable

DCIT Vs EIH Associated Hotels Ltd. (ITAT Kolkata) - DCIT Vs EIH Associated Hotels Ltd. (ITAT Kolkata) It is noted that the staff recruitment expenses were incurred only exclusive for the purpose of business and hence allowable expenditure. We note that the expenses on account of employees’ relation expenses to the tune of Rs. 3,78,242/- was incurre...

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Recent Posts in "Section 37"

Non Contractual/ gratuitous Compensation to family of deceased employee allowable

DCIT Vs Adsun Offshore Diving Contractors Pvt. Ltd. (ITAT Mumbai)

DCIT Vs Adsun Offshore Diving Contractors Pvt. Ltd. (ITAT Mumbai) Given facts of the present case that whatever test may be applied in deciding whether any expenditure is allowable as a deduction under section 37, the essential requirement must in every case be as to whether the expenditure was either in reality or as a […]...

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Public Issue expenses is capital expenditure & not allowable as revenue expense

Tatia Sky Line & Health Farms Ltd. Vs ACIT (Madras High Court)

Tatia Sky Line & Health Farms Ltd. Vs ACIT (Madras High Court) Conclusion: Expenses incurred by assessee for Public Issue was not allowable as revenue expenditure as assessee miserably failed to establish the tenability and truthfulness of its claim that the expenditure was revenue in nature. Held:  Assessee, a public limited company...

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HC allows expense on Foreign Education & Training of Partner related to Business who continued after education

Aswathanarayana & Eswara Vs DCIT (Madras High Court)

Aswathanarayana & Eswara Vs DCIT (Madras High Court) We have examined the facts placed before the lower authorities and we find that the assessee is a partnership firm consisting of two brothers, two sons of one brother. All the four partners are duly qualified Engineers (B.E.) and the firm is carrying on Engineering Consultancy Profe...

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No section 37 addition for expenses not claimed by Assessee

USG Buildwell Pvt. Ltd. Vs Additional CIT (ITAT Delhi)

USG Buildwell Pvt. Ltd. Vs Additional CIT (ITAT Delhi) The Ld. DR submitted that the disallowance u/s 37 on account of additional payment for purchase of land was righty made as the assessee could not establish his case as the expenditure was incurred without any substantial evidence produced before the Assessing Officer to that effect [&...

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Staff Recruitment Expenses exclusively for the business are allowable

DCIT Vs EIH Associated Hotels Ltd. (ITAT Kolkata)

DCIT Vs EIH Associated Hotels Ltd. (ITAT Kolkata) It is noted that the staff recruitment expenses were incurred only exclusive for the purpose of business and hence allowable expenditure. We note that the expenses on account of employees’ relation expenses to the tune of Rs. 3,78,242/- was incurred for efficient functioning of the busin...

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Deduction from sale proceeds by monetary committee from e-auction sale of mineral stock is allowable U/s. 37(1)

M/s. M. Hanumantha Rao Vs ACIT (ITAT Bangalore)

Addition of amount representing 15% of sale proceeds deducted by the Monetary committee from e-auction sale of mineral stock belonging to assessee and which was contributed to Special Purpose Vehicle, as per the direction given by Hon’ble Supreme Court was justified as the same constituted trading receipts in the hands of assessee, but ...

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ITAT explains CSR expenditure Allowability under section 37

Add. CIT Vs Rites Limited (ITAT Delhi)

 Addl. CIT Vs Rites Limited (ITAT Delhi) AO has disallowed claim of the assessee company qua CSR expenditure by misinterpreting the provisions contained under section 37(1) of the Act by observing that since CSR expenditure is not incurred for the purpose of carrying on the business, such expenditure cannot be allowed under the existing ...

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Section 37 General Deductions allowed for Business & Profession

According to Section 37 of the Income Tax Act, 1961, any expenditure not being the expenditure allowed under Sections 30 to 36 and not of capital or personal nature and which are expended exclusively for the purposes of the business or profession are allowed while computing the income from business or profession. Conditions laid out [&hel...

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Expenditure on R&D for manufacture of aircrafts to be sold allowable U/s. 37

Hindustan Aeronautics Limited Vs ACIT (Karnataka High Court)

The fact that a certain payment constitutes income or capital receipt in the hands of the recipient is not material in determining whether the payment is revenue or capital disbursement qua the payer. It has further been held that whether a transaction is capital expenditure would have to be determined having regard to the nature of the t...

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Bad Debt cannot be claimed as deduction unless written off in Books

Allu Arvind Babu Vs ACIT (Madras High Court)

Allu Arvind Babu Vs ACIT (Madras High Court) The claim of creation of provision for such expenditure, which is not yet incurred and is only intended to be written off as compensation paid to the land owner for the admitted failure of the Assessee to complete the contract in the manner as agreed between the […]...

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