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CONTRIBUTION BY PROFESSIONAL TO PROFESSIONAL INSTITUTE PROFESSIONAL EXPENDITURE?

Income Tax - By: - Mr.M. GOVINDARAJAN - Dated:- 8-12-2016 Last Replied Date:- 11-12-2016 - Section 37(1) of the Income Tax Act, 1961 ( Act for short) provides that any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head Pro .....

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tern India Regional Council of the Institute of Chartered Accountants of India towards the construction of a building for the Pune Branch of the Institute. The assessee claimed the said payment as an expenditure incurred wholly and exclusively for the purposes of the profession. Even though the Institute has a scheme under Section 80G of the Act for the deduction of donation from the income, the assessee only preferred to claim under Section 37(1). The Assessing Officer was of the view that the .....

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dressal through an appeal. The Tribunal found the following facts from the records presented in this case- The Pune Branch of the Western Regional Council of the Institute of CharteredAccountants of India had proposed to construct a building for its administrative functions including an auditorium, IT center, reading room facilities for members and students, pantry, cafeteria and parking facilities; The Branch, for this purpose, proposed to raise funds through donation/contributions from members .....

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and 30-40% of the revenues are generated from Pune; The assessee firm employed more than75 personnel including members, semi qualified and articles; The firm and its partners have since been exposed to greater and exposure and participation in seminars, symposium etc., The assessee was of the view that by donating the amount, their firm has been able to attract good Articled clerks and other professional and therefore the firm contributed the said amount to the Pune Branch. The assessee contend .....

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ess. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as a business expenditure if it was incurred on the grounds of commercial expediency. In Sri Venkata Satyanarayana Rice Mill Contractor Co - 1996 (10) TMI 2 - SUPREME Court the Supreme Court held that any contribution made the assessee to a fund which is directly connected or related to the carrying on of the assessee s business or which results in benefit to the assessee s business has to be rega .....

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