Law: Income Tax Act, 1961

Section: 37

(a) Income-tax----Business expenditure---General principles---Provision for contingent liabilities is not deductible---Provision for salaries and wages payable for unutilised leave---Contingent liability---Provision not deductible---Indian Income Tax Act, 1961, S.37---Indian Factories Act, 1948. (b) Income-tax- ----Business expenditure---Company---Surtax not deductible---Income Tax Act, 1961, S.37---Indian Companies (Profits) Surtax Act, 1964. (c) Income-tax--- ----Capital or revenue expenditure---Company---Expenditure incurred on issue of rights shares---Capital expenditure---Indian Income Tax Act, 1961, S.37. (d) Income-tax--- ----Business expenditure---Disallowance---Expenditure on perquisites and benefits to employees ---Accesses building used as residential quarters of employees---Depreciation, property tax and ground rent and repairs for normal and routine maintenance cannot be disallowed---Indian Income Tax Act, 1961, S.40-A(5). (e) Income-tax --- ----Depreciation---Rate of depreciation---Building---Factory building--¬Canteen is part of factory building---Entitled to higher rate of depreciation--¬Indian Income Tax Act, 1961, S.32. (f) Income-tax--- ----Depreciation---Actual cost---Foreign exchange---Increase in value of asset due to fluctuation in rate of foreign exchange---Depreciation allowable on such increase---Indian Income Tax Act, 1961, Ss.32 & 43-A. (g) Income-tax--- ----Depreciation---Building---Roads and drains laid within factory premises must be regarded as building---Entitled to depreciation---Indian Income Tax Act, 1961, S.32. (h) Income-tax- ----Depreciation---Plant---Pipelines, sanitary fittings and storage tank--¬Functional test to be applied to determine whether they are plant---Matter remanded---Indian Income Tax Act, 1961, S.32. (i) Income-tax- ----Depreciation---Initial depreciation---List in Ninth Schedule---Components of agricultural machinery not entitled to initial depreciation---Indian Income Tax Act, 1961, Sched. IX. (j) Income-tax-- ----Export markets development allowance---Weighted deduction---Insurance premium paid to Export Credit Guarantee Corporation---Entitled to weighted deduction---Indian Income Tax Act, 1961,…

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