Section 37 articles

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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General Deductions of Expenditure Under Section 37(1)

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

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

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

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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Allowability of sales promotion expenses to pharmaceutical companies

Pharmaceutical companies have received some relief in the recent favorable decisions such as Aishika Pharma (P.) Ltd. which have allowed tax deduction of expenses in the nature of sales promotion, marketing and distribution expenses which would otherwise be outright disallowed by tax authorities due to Circular No. 5/2012 dated 1-8-2012 i...

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Bad debts are allowable expenses and it is not necessary for the assessee to establish that debt has become irrecoverable

Bad debts are allowable expenses and it is not necessary for the assessee to establish that the debt has become irrecoverable Gone are the days when the the Assessing Officer would disallow the sum debited in the P&L account as non-recoverable sums written off as bad debts.  The Assessing Officer cannot disallow the sum in […]...

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Is expense incurred for Issue of redeemable preference shares is deductible

Issue Involved/Facts – Whether expenditure incurred for preparing prospectus, payment of underwriting commission and brokerage for issue of redeemable preference shares is deductible as Revenue Expenditure? Arguments in against – 1) Hindustan Gas & Industries Ltd. v. CIT [1979] 1 Taxman 546 (Cal.): Facts of the case: The assessee-...

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Section 37: Fees paid for enhancement of authorized capital; revenue or capital expense??

This article is about one of the most important things which came out in terms that how to treat fees paid for enhancement of authorized capital to Registrar of Companies. Will it be a revenue expenditure or capital expenditure? Before starting it up and finding the answer let's just start it with what is Section 37 of the Income Tax Act,...

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