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2017 (8) TMI 751 - HC - Income TaxDisallowance of business expenditure - Interest income - The principal source of recurring income of the assessee is from the members - as ITAT has observed, it was absolutely necessary for the assessee to maintain goodwill amongst its members and to lure them to continue to do their business with the society if it give presents to its members and to commemorate silver jubilee celebrations - Held that:- Tribunal accepted the assessee’s version that the expenditure was incurred for the purpose of business to maintain goodwill and continuity of business being provided by important members. It was pointed out that these members had provided for nearly 98% of the bank’s business and the expenditure was marginal as compared to the interest realised on advances made to such members by the bank and the amount of deposits made by the members with the bank. The Tribunal held that merely because there was no legal obligation to incur such expenditure would not mean that the same was not allowable business expenditure if it could be pointed out that the expenditure incurred in preserving the business connections and goodwill of business. No question of law arises
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