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2018 (8) TMI 851 - AT - Income TaxDisallowance of deduction u/s 36(1)(va) - Provident Fund and Employees State Insurance (FP & ESI) contribution - failure to deposit before the due date of return - Held that:- where assessee did not deposit employees' contribution to employees' account in relevant fund before due date prescribed in Explanation to section 36(1)(va), no deduction would be admissible even though he deposits same before due date under section 43B. - Additions confirmed - Decided against the assessee. Disallowance of alleged legal expense u/s 37(1) - nature of payment of compounding feed - Held that:- the impugned expenditure incurred by the assessee is more in the nature of compensatory and necessitated by commercial expediency. In the normal incidences of business, certain damages are to be paid by an assessee and the expenses so incurred is an allowable deduction in the ordinary course of the business. The letter of Inspector of Legal Metrology, Nagpur dated 11.7.2012 states that the assessee to make payment of ₹ 20,000/- to avoid any future litigation. The assessee has settled the issue by paying the sum as compensation/damages for the interest of its business, which according to us, cannot be treated as incurred for infraction of any law and therefore to be disallowed. - Expenses allowed - Decided in favor of assessee.
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