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2021 (9) TMI 1036 - AT - Income TaxAllowable revenue expenditure u/s 37(1) - Writing off of advance given to the Director - waiver of excess remuneration paid to the Director - HELD THAT:- Remuneration paid to the Director was approved by the Board of Directors of the assessee and the Central Government as well. The resolution has been passed by the Board of Directors for writing off advance recoverable and necessary approvals have been taken from the Central Government for waiver of recovery of excess remuneration paid to Mr. Arun Dagar. These documents were produced before the AO as well as before the CIT(A). The provisions of Section 37(1) clearly set out that once the proper approval has been taken the writing off advance recoverable cannot be disallowed. It is a genuine business expenses, the additions made by the AO cannot be said to be in the nature of capital expenditure, since no enduring benefit accrues or arises to the assessee from advancing loan to the MD. Thus, the same accordingly acquires character of revenue expenditure. The said expense are being incurred wholly and exclusively for the purpose of the business of the assessee and hence, is fully deductable u/s 37(1) - Decided in favour of assessee.
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