Income Tax : Explains when food and hospitality expenses qualify as business deductions and outlines the tests under Section 37(1) to distingui...
Income Tax : Explains how Section 37(1) restricts deductions to expenses exclusively for business and highlights gray-area items like home offi...
Income Tax : ITAT Ahmedabad held settlement payments in foreign civil cases are deductible under Section 37(1) as compensatory, not penal, and ...
Income Tax : Summary of Section 37(1) IT Act for business expenditure deduction. Covers "wholly and exclusively" test, commercial expediency, ...
Income Tax : Examines the tax implications of employer-funded education, covering employer deductions and employee taxation. Includes analysis ...
Income Tax : Interest income earned by a foreign bank from foreign currency loans extended to Indian corporates was taxable on a gross basis. S...
Income Tax : ITAT Jodhpur held that Section 37(1) business expenses cannot be disallowed without specific findings on genuineness. All appeals ...
Income Tax : ITAT Mumbai held that an accrued business liability supported by evidence is deductible under Section 37(1) despite future payment...
Income Tax : ITAT Mumbai held that eligible CSR donations qualify for Section 80G deduction if statutory conditions are met, despite disallowan...
Income Tax : ITAT held that increased employee remuneration cannot be disallowed merely because business revenue declined where the expenditure...
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‟
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 dividend and the same was not allowable as deduction under Section 36(1)(ii).
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.
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.
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.
Taurian Iron & Steel Co. Pvt. Ltd. Vs. Ad. CIT (ITAT Mumbai)- In the case of Haji Aziz And Abdul Shakoor Brothers (supra) it was held that fine paid to the Custom Authorities was in fact penalty u/s 167 (8C) of the Customs Act. It was held by the Hon’ble Apex Court that such penalties which are incurred by an assessee in proceedings launched against him for an infraction of the law cannot be called commercial losses incurred by an assessee in carrying on his business. In the case of Rohit Pulp & Paper Industries (supra) the Deputy Collector of Customs had ordered confiscation of goods under section 111(d) of the Customs Act read with section 3 of the Imports and Exports (Control) Order.
ACIT Vs. Parablic Drugs Ltd. (ITAT Delhi) – It has to be held that all of these expenditure were incurred by the assessee in the course of its business and none of the expenditure can be classified as expenditure in the nature of capital. The case law relied upon by the ld. AR supports the case of the assessee. Therefore, we found no infirmity in the order of CIT(A) vide which the assessee has been held eligible for deduction of these expenditure under both the sections either u/s 35(1)(i) or u/s 37(1) of the Act.
The DOT licence fee paid by assessee is not in the nature of capital expenditure falling under section 35ABB, but the same is revenue in nature, allowable under section 37(1)
At the outset, we may note that although in view of the orders passed by the Committee on disputes, advising the Revenue not to file appeals against Tribunal’s orders, we find some substance in the objection of learned counsel for the Assessee about the maintainability of Revenue’s appeals before the High Court but as we have heard learned counsel for the parties on merits of the appeals, at this stage, we do not propose to go into this question. We also reject at the threshol
The Tribunal was correct in holding that consideration paid by the assessee to certain American Company for providing technicians to train assessee’s personnel in manufacturing, testing, inspection and quality control of its products and to impart know-how and technical data and suggest improvements thereto, did not fall under section 35AB, but was entitled to total relief under section 37(1)
