The Tax Publishers2021 TaxPub(DT) 0349 (Kol-Trib)

INCOME TAX ACT, 1961

Section 37(1) Section 40(a)(ii)

Education cess was an allowable expenditure under section 37(1) and same was not hit by section 40(a)(ii).

Business expenditure - Allowability - Education cess - Applicability of section 40(a)(ii)

Assessee claimed deduction of education cess paid by it. AO invoked section 40(a)(ii) and disallowed deduction. Held: The word 'cess' has been omitted from section 40(a)(ii) and therefore, the word 'cess' has to be interpreted as not being tax. Hence, education cess was an allowable expenditure under section 37(1).

Followed:CIT v. Chambal Fertilizers and Chemicals Ltd. [ITA No. 52/2018)(Raj- HC)] and Sesa Goa Limited v. Jt. CIT (2020) 117 taxman.com 96 (Bom-HC) : 2020 TaxPub(DT) 1546 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14



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