section 37(1)

Whether Inaugural Expenses Deductible Under Section 37 (1)

Income Tax - Many times reference has been sought regarding the question whether inaugural expenses incurred by a person are deductible under section 37(1) or not while computing the profits & gains from business or profession (of that person)....

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

Income Tax - 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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Claim of deduction of Loss Due to Dacoity, Theft, Embezzlement, etc., as Business Loss

Income Tax - The losses occurring to an assessee due to dacoity, theft or embezzlement, etc., may be claimed as deductible while making the income chargeable to income-tax under the head profits and gains of business or profession under section 28. The loss by theft is not covered by section 10(2) (xv) of the Income Tax Act, 1922...

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Whether Inaugural expenses deductible Under Section 37(1)

Income Tax - In CIT vs. Nirlon Synthetic Fibres & Chemicals Ltd. (1982) 137 ITR 1 (Bom) it was observed that expenditure incurred on inauguration ceremony of factory is a compelling necessity in modern times, it is a formality which an assessee has to incur after the business is set-up therefore it is an allowable deduction in terms of section 37(1)....

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Making Chargeable to Tax U/s. 41(1) of Allowance/Deduction Already Made

Income Tax - The Supreme Court in CCIT vs. Kesaria Tea Co. Ltd. (2002) 20 SITC 172 (SC) has laid down that the resort to section 41(1) can be taken only if the liability of the assessee can be said to have ceased finally and there is no possibility or reviving it. Also, it has held that an unilateral action on the part of the assessee by way of writin...

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Expenses not allowable on Failure to prove that it was incurred for business purpose

Kanhaiyalal Dudheria Vs Jt. CIT (ITAT Bangalore) - These are appeals filed by the assessee-firm directed against the common order of the Commissioner (Appeals), Gulbarga, dated 29-1-2016 for the assessment years 2011-12 and 2012-13. Since common issue is involved in both the appeals, we proceed to dispose of the same by this common order....

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Income tax withheld abroad in respect of which no foreign tax credit is admissible, cannot be allowed U/s. 37(1)

Dy. Commissioner of Income Tax Vs Elite core Technologies Private Limited (ITAT Ahemdabad) - These cross appeals are directed against the order dated 29th December 2015 passed by the CIT(A) in the matter of assessment under section 143(3) of the Income Tax Act, 1961, for the assessment year 2012-13. Both of these appeals are being disposed of, as a matter of convenience, by this consolidate...

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Allowability of Loss on sale of shares of wholly-owned subsidiary

Apollo Tyres Ltd. Vs. ACIT (ITAT Cochin) - In the case of Apollo Tyres Ltd vs. ACIT , ITAT Cochin held that The loss on sale of shares of a wholly-owned subsidiary is allowable under Section 37(1) of Income Tax Act, 1961 as a business loss if the investment in the subsidiary was made for commercial purposes....

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Guarantee Commission Paid for Acquisition of Fixed Assets – Allowable as Revenue Expenditure

Chandigarh State Road & Bridges Development Corporation LTD. Vs CIT (Punjab & Haryana High Court) - Section 37(1): (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of business or profession...

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Compensation paid for damage to environment is allowable

Shyam SEL Ltd. vs. DCIT (Kolkata High Court) - The compensation was paid because the assessee had failed to install the pollution control device within the time prescribed. Therefore, payment of the sum of Rs.12,50,000/- is not hit by Explanation-1 to Section 37 of the Act. The Hon’ble judges of the Kolkata High Court by setting aside the ord...

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Recent Posts in "section 37(1)"

Whether Inaugural Expenses Deductible Under Section 37 (1)

Many times reference has been sought regarding the question whether inaugural expenses incurred by a person are deductible under section 37(1) or not while computing the profits & gains from business or profession (of that person)....

Read More
Posted Under: Income Tax |

Expenses not allowable on Failure to prove that it was incurred for business purpose

Kanhaiyalal Dudheria Vs Jt. CIT (ITAT Bangalore)

These are appeals filed by the assessee-firm directed against the common order of the Commissioner (Appeals), Gulbarga, dated 29-1-2016 for the assessment years 2011-12 and 2012-13. Since common issue is involved in both the appeals, we proceed to dispose of the same by this common order....

Read More

Income tax withheld abroad in respect of which no foreign tax credit is admissible, cannot be allowed U/s. 37(1)

Dy. Commissioner of Income Tax Vs Elite core Technologies Private Limited (ITAT Ahemdabad)

These cross appeals are directed against the order dated 29th December 2015 passed by the CIT(A) in the matter of assessment under section 143(3) of the Income Tax Act, 1961, for the assessment year 2012-13. Both of these appeals are being disposed of, as a matter of convenience, by this consolidated order....

Read More

Allowability of Loss on sale of shares of wholly-owned subsidiary

Apollo Tyres Ltd. Vs. ACIT (ITAT Cochin)

In the case of Apollo Tyres Ltd vs. ACIT , ITAT Cochin held that The loss on sale of shares of a wholly-owned subsidiary is allowable under Section 37(1) of Income Tax Act, 1961 as a business loss if the investment in the subsidiary was made for commercial purposes....

Read More

Guarantee Commission Paid for Acquisition of Fixed Assets – Allowable as Revenue Expenditure

Chandigarh State Road & Bridges Development Corporation LTD. Vs CIT (Punjab & Haryana High Court)

Section 37(1): (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of business or profession...

Read More

Compensation paid for damage to environment is allowable

Shyam SEL Ltd. vs. DCIT (Kolkata High Court)

The compensation was paid because the assessee had failed to install the pollution control device within the time prescribed. Therefore, payment of the sum of Rs.12,50,000/- is not hit by Explanation-1 to Section 37 of the Act. The Hon’ble judges of the Kolkata High Court by setting aside the orders of ITAT held that payment was und...

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Voluntary CSR Expense allowable as business expenditure

ACIT vs. Jindal Power Limited (ITAT Raipur)

CSR expense disallowance is restricted to the expenses incurred by the assessee under a statutory obligation under section 135 of Companies Act 2013, and there is thus now a line of demarcation between the expenses incurred by the assessee on discharging corporate social responsibility under such a statutory obligation and under a volunta...

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Commitment charges paid towards foreclosure of business agreement are allowable u/s 37

D.C.I.T. Vs Autoline Industries Ltd (ITAT Pune)

In the case of D.C.I.T. vs Autoline Industries Ltd, Pune Tribunal held that foreign exchange cover taken by the assessee from DBS Bank was in order to prevent itself from future currency rate fluctuations. Later, it had to close its agreement with DBS Bank in view of the offer made by the principal lender i.e. Citi Bank....

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Revenue expenses after setting up of business allowable despite non-commencement of business

Reliance gems & Jewels ltd Vs DCIT (ITAT Mumbai)

ITAT Mumbai held in Reliance gems & Jewels ltd Vs DCIT that the revenue expenditure would be allowed as an expense after the setting up of the business before the commencement of the business. The expense incurred on recruitment of employees gave indication that the business had been set up ...

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

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,...

Read More
Posted Under: Income Tax |
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