section 37(1) - Page 18

Mere denial by RBI to Register Assessee as NBFC do not change nature of business income to Income from Other Sources

Premius Investment and Finance Ltd Vs DCIT (ITAT Mumbai)

Permission/denial by the RBI to register an assessee as NBFC does not decide the issue of carrying of business or make the business illegal. We hold that the interest income earned by the assessee has to be taxed under the head business income and all the expenses related with it have to be allowed....

Expenditure on abandoned capital project can be claimed in year of abandoning project

M/s Binani Cement Ltd Vs CIT (Calcutta High Court)

Following the judgment in the case of Gajapathi Naidu (supra) the question to be asked is when did the expenditure claimed by way of deduction arise? There would have been no occasion to claim the deduction if the work-in-progress had completed its course....

Disallowance of Advertisement expense merely because same were exorbitant

CIT Vs Discovery Communication India (Delhi High Court)

Advertisement expenditure was incurred in terms of the license agreement granting the distribution rights to the assessee by the associated enterprise, Discovery Asia Inc. Under this agreement, the respondent­ assessee had procured right to distribute the signals of Discovery ...

No disallowance of lawful expense for mere non-compliance with Company law provisions

Jai Surgicals Ltd Vs ACIT (ITAT Delhi)

Assessee entered into transactions of payment of job work charges to a related party, viz., M/s Razormed Inc. during the financial year relevant to assessment year under consideration without obtaining prior approval of the Central Government in accordance with the provisions of section 297 of the Companies Act, 1956....

Expenses incurred to defend directors arrested under NDPS Act not allowable

Ms OPM International Pvt. Ltd. Vs Dy. Commissioner of Income Tax, Range 2(2) (ITAT Mumbai)

It is noticed that this expenditure was incurred as a professional fees to defend two directors of the assessee company who were arrested under NDPS Act on being found guilty of the offences under the relevant sections of the said Act....

AO not justified in making disallowance u/s 37 for expenses incurred by assessee before commencement of business operation but after setting up of business

Commissioner of Income Tax Vs Samsung India Electronics Ltd. (Delhi High Court)

The important question that has got to be considered is from which date are the expenses of this business to be considered permissible deductions and for that purpose the section that we have got to look to is section 2(11) and that section defines the „previous year‟...

Reassessment on the basis of subsequent decision cannot be said to be a mere change of opinion

M/s Dalal & Broacha Stock Broking Pvt. Ltd. Vs ACIT (Bombay High Court)

The assessment in the instant case was re-opened on the ground that the Special Bench of the Tribunal in the assessee's own case for AY 2006-07 had reversed the earlier decision of the Tribunal in the assessee's case for AY 2005-06 whereby the Special Bench held that the commission of Rs.1 .20 crores to the three Directors was in lieu of ...

Deduction can be claimed in respect of a crystallized liability

Commissioner of Income Tax-II Vs M/s Bhagwati Corporation (Gujarat High Court at Ahmedabad)

Though the questions are multiple, issue is single, namely, the deduction of Rs.61,08,500/- claimed by the assessee towards expenditure being part of development charges. The assessee had paid such sum to Surat Municipal Corporation towards water connection charges....

Foreign trip Expenses on spouse of Director not allowable unless connected with business

Harinagar Sugar Mills Limited Vs. ACIT (ITAT Mumbai)

Expenses incurred by the assessee on the foreign tour of spouses of the Directors were wholly gratuitous and for a purpose outside the course of its business. As the incurred expenditure was for extra-commercial reasons, so, same is not deductible under section 37(1) of the Act....

CBDT Circular disallowing expenditure on freebies to medical practitioners is valid

Confederation of Indian Pharmaceutical Industry (SSI) Vs . The Central Board of Direct Taxes (CBDT) (Himachal Pradesh High Court)

If the assessee satisfies the assessing authority that the expenditure is not in violation of the regulations framed by the medical council then it may legitimately claim a deduction, but it is for the assessee to satisfy the assessing officer that the expense is not in violation of the Medical Council Regulations referred to above....

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