Preface

Section 37(1) of the Income Tax Act is a residuary provision having tremendeous importance while computing income under the head "profits and gains from business or profession". Expenditures which are not deductible under any specific provision are deductible under section 37(1), subject to fulfilment of conditions prescribed therein. These conditions are:

(i) expenditure must be revenue expenditure and not in the nature of capital expenditure;

(ii) it must be laid out or expended wholly and exclusively for the purpose of the business or profession carried on by the assessee;

(iii) it must not be of the nature described in sections 30 to 36;

(iv) expenditure should not be personal expenditure of the assessee;

(v) expenditure should have been incurred in the previous year; and

(vi) expenditure should not have been incurred for the purpose which is an offence or which is prohibited by law.

While running a business or profession various kinds of expenses have to be incurred. In order to determine their deductibility under section 37(1), one has to go through certain tests or principles based on the abovementioned conditions. Further, there is a huge case law bank which provides guidelines for determining the nature of a particular expenditure.

The present book is an innovative effort of its kind for rigorously analysing the scope and ambit of section 37(1) of the Income Tax Act. The contents of the book are divided in as many as 10 Parts, comprising 71 Chapters in all. These Parts are :

 

Part I

:

Introductory

 

Part II

:

Tests for Determining Allowability or Disallowability of Expenditure

 

Part III

:

Accrual of Liability Vis-a-Vis Allowability

 

Part IV

:

Expenditure Relating to Setting Up, Acquisition & Protection of Business & Business Assets

 

Part V

:

Fund Raising Expenditure

 

Part VI

:

Expenditure Vis-a-Vis Running of Business

 

Part VII

:

Payments Against Statutory Obligations

 

Part VIII

:

Payments Vis-a-Vis Employees

 

Part IX

:

Expenditures Specific to Particular Kinds of Assessees

 

Part X

:

Treatment of Illegal Expenses & CSR Expenses

The headings of parts are self-explanatory. Each of the Chapters dealing with a particular type of expenditure is further divided under the following headings as far as possible :

A. Principles as to Determination of Nature of Expenditure

B. Instances where Expenditure Held Allowable

C. Instances where Expenditure Held Not Allowable

D. Instances where Expenditure Held Partly Allowable

The presentation and lay out of the Chapters ensure instant access to the desired case law relevant to particular nature of expenditure for or against the assessee. Every user of the book would therefore be able to find answer regarding question before him in an easy and quick manner.

Incorporation of around 3,700 case law reflects the rigour and strength of the book. Website support available free of cost with the book provides full reports of case law along with the headnotes of nearly all of cases cited in the book apart from Circulars and Notifications discussed in the book.

We are confident enough  that our present work will be of great help to the professionals, tax practitioners, tax administrators, etc. to arrive at the right conclusion while claiming or allowing or disallowing of a particular type of expenditure.

Though we have tried to provide a never before outcome from our efforts, however, any idea for its further improvement is always welcome.

JODHPUR

Dr. AVADHESH OJHA

15 JANUARY, 2019

Dr. (CA.) NISHA BHANDARI

MAKAR SANKRANTI