Hai friends,
Whether fee paid for filing appeal against IT order is an allowable expenditure??
5 Replies
Sonam Bidasaria
(CA)
(770 Points)
Replied 05 June 2013
No..It is not an allowable expenditure as per Sec 37(1).
Sindhuja
(Final Student)
(113 Points)
Replied 06 June 2013
Ya, I had the same view as you had,
but it is not incurred for any intraction of law to be disallowed u/s.37(1)
I have arguments on both sides, if you can give the logic or reason behind this I will be more comfortable
Sonam Bidasaria
(CA)
(770 Points)
Replied 06 June 2013
Sec 37(1) states that any expenditure incurred wholy and exclusively for the purpose of business or profession shall be allowed in computing the income chargeable under the head PGBP.
However, amount incurred on account of Appeal Fees does not have any connection with the profitabilitly of the company and it cannot be said that it is incurred for the business of the company.
Hence, it is not allowed.
Sindhuja
(Final Student)
(113 Points)
Replied 06 June 2013
stress is given for the purpose & nowhere it is said that the purpose should be profitability
This expense is incurred only because of the business, it doesn't have any personal nature...
TKKKKKK
(PRACTICING CA)
(3268 Points)
Replied 06 June 2013
It is allowable. as it has not nature of penalty.
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