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Section 37(1) is basket section which can hold any kind of expenditure other than personal and capital expenditure.
Vide [2016] 6 ITR-OL 0646- [2016] it is held that expenditure incurred voluntarily and without any necessity is also deductible under section 37(1) of the Act, so long as it is incurred wholly and exclusively for the purposes of business.
In this case the assessee took upon itself additional excise duty demand pursuant to the order of the Settlement Commission against its contract manufacturers on the pretext of the long term interest of its business which expenditure according to the Court is an admissible under the law.

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