Law: Income Tax Act, 1961

Section: 37

(a) Income-tax---Business expenditure---General principles---Meaning of expression "for the purposes of business "---Cooperative society---Contribution to education fund of State under provisions of Maharashtra Cooperative Societies Act--¬Statutory obligation---Contribution was directly related to carrying, on of business---Contribution was deductible under S.37---Indian Income Tax Act, 1961, S.37---Maharashtra Cooperative Societies Act, 1960. (b) Words and phrases---- For the purposes of business" ---Meaning. Section 37 of the Income Tax Act, 1961 provides for deduction of any expenditure laid out or expended wholly and exclusively for the purposes, of the business in computing the income chargeable under the head "Profits and gains of business or profession". The only exception is capital expenditure or personal expenses of the assessee or expenditure of the nature described in other sections of Chapter IV of the Act. The expression "for the purpose of the business" is wider in scope than the expression "for the purpose of earning profits". Its range is wide: it may take in not only the day to day running of a business but also the rationalisation of its administration and modernization of its machinery; it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, coercive process or assertion of hostile title; it may also comprehend payment of statutory dues and tares imposed as a pre-condition to commence or for the carrying on of a business; it may comprehend many other acts incidental to the carrying on of a business. The only limitation is that it should be for the purpose of the business, that is to say, the expenditure incurred should be fo7 the -carrying on of business and the assessee should incur it in his capacity as a person carrying on the business. It cannot include sums spent for purposes unconnected with the business. The assessee was a cooperative society registered under the Maharashtra Cooperative Societies Act, 1960. It was engaged in the manufacture and sale of sugar. Under section 68 of the Maharashtra Cooperative Society Act, it was required to make a contribution to…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492