Law: Income Tax Act, 1961

Section: 10(6)(viia),40(c)8c40A(5)(b),

(a) Income-tax----Business expenditure---Ceiling on expenditure---Exemption---Director of company a foreign technician entitled to- exemption under S.10(6)(viia)---Amount exempt under S.10(6)(viia) is not to be taken into account for fixing coiling under S.40(c) read with S. 40A(5)(b)---Indian Income Tax Act, 1961, Ss .10(6)(viia), 40(c) 8c 40A(5)(b), (b) Income-tax--- ----Business expenditure---Company---Surtax paid by assessee not to be deducted while computing total income under Income-tax Act---Indian Companies (Profits) Surtax Act, 1964. (c) Income-tax--- ----Business expenditure---Mercantile system of accounting ---Assessee entering into contracts for supply of insulators to Electricity Boards--­Provision for reduction in contract price by 1/2 per cent. per week of contract value if assessee failed in due performance of contract within time fixed in contract---No demand against assessee that it was responsible for delay---No determination of damages by any adjudicatory forum---Mere entries in books of account as compensation payable to Electricity Board---Not an accrued liability to be deducted. A Director of the assessee-company who is a foreign technician is entitled to exemption under section 10(6)(viia) of the Income Tax Act, 1961, and the amount so exempt is not to be taken into account for fixing the ceiling under section 40(c) read with section 40A(5)(b). CIT v. Lucas TVS Ltd. (1997) 226 ITR 281 (Mad.) fol. Surtax paid by the assessee under the provisions of the Companies (Profits) Surtax Act, 1964, is not required to be deducted while computing the income of the assessee under the Income Tax Act, 1961. Smith Kline & French (India) Ltd. v. CIT (1996) 219 ITR 581 (SC) fol. It is well-settled that it is not the mere entry made in the books of account that is determinative of the nature of a transaction or of the character of the receipt or the payment. The true nature of the same is required to be determined for the purpose of treating it as income or expenditure. The assessee's liability for damages, if any, cart be regarded as having been settled finally only after settlement award or in the event of a dispute. Where the assessee clearly…

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