(Amendments we.f. Assessment Year 2020-21 _ Sections 35AD, 40A and 44AB ‘The provisions regarding income chargeable under the head “Profits and Gains of Business or Profession’ are contained in sections 28 to 44D of the Income Tax Act, 1961. Before studying these provisions it is necessary to understand the meaning of certain terms. ‘Business ; Business means the purchase and sale or manufacture of a commodity witha vier make profit. It includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or"manufacture. It is not necessary that there should be a series of transactions in a business and that it should be carried on. permanently. Neither repetition nor continuity of similar transactions is necessary. Profit of an jsolated transaction is also taxable under this head, provided that it is a venture in the nature of business or trade. In this connection, itis important that the intention of purchase or manufacture should be to sell ata profit. [Sec. 213) Profession : Profession means the activities for earning livelihood which requires intellec tual alall or manual skill, ez. the work of a lawyer, doctor, auditor, engineer and so on, areit the nature of profession. The profession includes vocation. Vocation means activities which are i insurance agency, music, dancing, et performed in order to earn a livelihood, e.g., brokerage, Perc rales for the assessment of business, profession or voeation are the same, there isc mportance of making any distinction between them for income tax purposes; [Sec. 2361 ‘Danerger : in relation to a company, demerger means the transfer by a demerged compass ofite one or more undertakings to any resulting company which fulfils the prescribed conditise [Sec. 219A! Demerged Company : 1 means the company whose undertaking is transferred, pursusst a demerger, to a resulting company. [Sec, 2(19AAA! Revulting Company : it means (i) one or more companies (including a wholly owne! nubsldiary thereof) to which the undertaking of the demerged company is transferred in! [Se demerger; . , . ec. 241A Gi) the resulting company in consideration of such transfer of undertaking issues shares tho sharcholders of the demerged company; and (ui) ineludes any authority or body or local authority or public sector company or a com! established, constituted or formed as a result of demerger. 2% PROFITS AND GAINS OF BUSINESS OR PROFESSION (See. 28 ‘Tho following incomes are chargeable to income tax under the head ‘Profits and Gains Business or Profession’: (1) Revenue profits from business or profession : The profits and gains of busines profeasion which was earried on by the assessee at any time during tthe previous yet (a) Any compensation due fa oF received by : : (a)any person, managing the w hole or substantially the whole irs of an 1nd Company in connection with the termination of his Sean at nodes of the terms and conditions relating thereto; I Py Scanned with CamScanner8 GAINS OF BUGNESS GA PROF (b) any person, managing On of any other the whol n eT comp: ole or substai . to mmnfeation of the tery batantially the whote of the affairs in Indie, (c) any person, hol phe in of his offiee or the any person. holding an agency inte ‘ Teese nilin for any part of the activit 7 gna aren An connection with the ities relating to the person, for 6 ‘and conditie n of an agency oF . for oF in con ma rela corporation ow! nection with the ; being in force ofthe meee raed by the Obvetiasent, wader cay lew foe tha tae 4 e management, ldvetrment. onder any lew for the the The compensation received ha te any Broperty oF business " He tia i " ion received by the is a capital receipt and not naeaa person on cancellation of cor (e) Any person at or i ICIT vn Berk y pers in and conditions, ote eection withthe termination or the mifestion (3) Income of tage uofanycontract relating his usiness. ice Asesament srcoctation em amraciation ete. : Income derived by a trade, profession (4) Receipts in connection with forcign rene 1 its members: (a) Profit on sale ofa lence permed veces (b) Cash assistance eae the Imports Control Order, 1955; vo mhemeat the ce received or receivable by any person againat exports under any c) Repayment of any o 3 Repent any Serre uy ny ern ei oe Renlesion Scheme ao of the Duty Entitlement Pass Book Scheme, be coy peimission Scheme, under the export and impart policy Duty Remission Scheme, under the export Replenishnes oe (5) Value of any b Darth Lipa aaanM* Volue of any Benefit or penquiaite : Tha valve of wy benefit or perquisite + eae not, arising from business or the exercise of a prof sidet n_ of his i e sere aa al be asseceable in the hands of the assesses as h apes ae the value willbe assessable in i hands ofthe assess a his income under # ness or Profession’. (6) Receipts of a partner from the firm : Any interest, salary, bonus, comm: remuneration due to or received by a partner of a firm from the firm provided that it has been allowed as a deduction in computing the taxable profits of such Srm. (1) Interest on securities : Interest on securities, ifthe business of the assessee is to invest in securities, otherwise interest on securities shall be chargeable to income tax under the head ‘Income from Other Sources’. (6) Any sum received under a Keyman Insurance Policy including bonus. ea alue of inventory as on the date on which it is converted into, or (8A) The fair market treated as, a capital asset. (we/. Assessment Year 2019-20) “d or receivable in cash or kind, under an agreement for: wity in relation to any business or profession; or ow, patent, copyright, trademark, licence, franchise or any yy right of similar nature or information or technique facture or processing of goods or provision of services. vayable, in cash or kind, on account of any capital ren or. financial instrument) being demolished: ir the whole of the expenditure on such capital 8 termi And conditions relating thereto. in cash or kind, on account of transfer eay article or thing or right to carry on any or the head ‘Capital Gains’ shall not be treated Scanned with CamScanner|OFITS AND RULES REGARDING ASSESSMENT CF, PR roe OF BUSINESS OR PROFESSION ie creensee : Tax is chargeable from the yr, mitt tho ansessee (owner ofthe buts, terial ator any other agent duly authoring ‘year only. ye Profits made in winds: rusiness profit but asacapi ie : Tax is levied on the actual pr fin a business there is an expectats= ed on such profits, | ated transaction of purchase and sale i= ‘ed by the assessce in such a transact arm ction during the years prior to the yeard such business r, penaltie jowert areas cor ndian Company or any other resident perso kept in view while determining the real profit “al principles while determin vt Losses: Business losses which are not of acapital nature and) fous year and which are incidental to the business scputing income under the ead Busia or Profs, |r deduction ore ‘if recovered during the wt the previous year nny sum connected with the busine Scanned with CamScannercan be ascertained by this method lowed as deductions which sere incurred of | ttuction, (8) Adeduction can be made from the income of that business only for which the expenses were “sured. The expenses of one business cannot be changed against the income of any other bemonee RULES FOR ADJUSTMENT OF PROFIT AND LOSS ACCOUNT PREPARED BY THE ASSESSEE Profit and Loss Account but are not 1 the profit, as shown by the Profit expense is partly disallowed, oaly mn te Profit and Loss Account, they should ‘Scanned with CamScannerfed but charged in income but not eredited to the ced amount charged in P. & L. Ne ack or over-valuation of opening stock... Expenses or losses allowed but not debited to P. & L. AVe Trabmes not taxable as business income but credited to the RL Ae the bone rules wl bereere fy tw lncore and Expenditure Account, ppl te Ince or ator Cash Bok, che following statement is prepare a cxponses relating tote profesion = Income fom Profeaon = = Second Method of Computing the Taxable Profits or Losses of Business or Proess: Firune and Tosa Account or Income and Expenditure Ace ions, The format ofthis method may be as under incomes under this head which relate to med i expenses under this head which eat to le business losses oe ‘Taxable Profits or Losses of Business or Profession = “Nate: Tesco metod in geerly wad in at of prfesions DEDUCTIONS EXPRESSLY ALLOWED sits of business or profession the folloscing deductions are expr premises : The following deductions are allows! siness or profession. e® smises. tobear the cost of repairs to the premises, the amount i!” amount paid ep orre a eovanatian; Toe umount paid pesbint of repare shal ot neh ide any land revenue, local taxes or municipal taxes. ie amount of any premium paid in respect of i cipal taxes, sof or destruction of the premises, id in respect of insurance against the risk of oa Scanned with CamScannerwunicipal taxes. tum paid in respect of insurance against the risk of damage or tment Allowance : See chapter on ‘Depreciation and Investment ‘a period of six months from the end of the previous income, whichever is earlier. forward business losses), altoed in rape ing fr or etrction production of ae “Weta eresons ct secna areas under ‘Se ABD 5. Deduct ‘evleum or natural gas or both in In wr has deposited the amount for the specified purposes in a scheme in the Ministry of Petroleum and id. aggregato ofthe amounts 20 deposited: oF sou the puted unr the bead Profits aod guns of Dusineas or profession) bofoe making any deduction hichever is less b sf Scanned with CamScanner} J WOE TA ’ Expenditure on Scientific Research : The following deductions shall be alloveg of expenditure on scientific research. ‘dine (i) Revenue expenditure incurred by the assessee himself ; Where the assess; carries on seientifie research in relation to his own business any revenue expenditure the aszessce on scientific research during the previous year shall be allowed in full", a . (Sec, a5, (i) Sums paid for Scientific Research to an approved Research Association etn Mi it College or other Institution, Where the assessee contributes any sum to an approved rear Secociation or to an approved university, college or other institution to be used for saa" research it is allowed as a deduction 150% (w.e,f. Assessment Year 2018-19) of the ame paid, whether it is related or unrelated to the business of the assessee [See Note the Assessment Year 2021-22, the deduction shall be allowed 100% instead of 150%, ii) Sum paid for scientific research to a company : 100% (wef. the Assessmen 2018-19) of the sum paid to a company shalll be allowed as a deduction if such company; (a) is registered in India, (b) its main object is scientific research and development; (c) it is approved by the prescribed authority; and (4) it fulfils such other conditions as may be prescribed. (iv) Sums paid for Social or Statistical Retearch : 100% (wef. the Assessment ¥,, 2018-19) of the sum paid to an approved research association or to a university, college ora, institution to be used for research in social science or statistical research is allo deduction, whether it is related or unrelated to the business of the assessee. (Sec. (v) Capital Expenditure on Scientific Research incurred by the assessee himself: salient features regarding such expenditure are as under : (See. 5(1f (1) Any expenditure of a capital nature on scientific research related to the buss caried on by the assessee is allowed in full for the relevant previous year. (2) Nodeduction shall be admissible in respect of any expenditure on the acquisition ofanyixe (@) Capital expenditure on scientific research which cannot be absorbed on acrou {acuificieney of profits under the business head or any other head, the unabsorbed p= ull be carried forward and treated in the same manner as unabsorbed deprecatz= (vi) Sums paid to a ‘National Laboratory’ or a recognised University or an Indian Institea of Technology for an approved scientifie research programme : The sum paid by an asss= to a‘National Laboratory’ or a recognised University or an Indian Institute of Technology t= approved person for carrying out scientific research programmes, which are approved b prescribed authority, willbe eligible as a deduction @ 150% (we,f.the Assessmen of the sum so paid. [Sec. 35231 Note: We.f. the Assessment Year 2021-22, the deduction shall be allowed 100% instead of 150%. ‘National Laboratory’ means a scientific laboratory functioning at the national evel unit the Indian Council of Agricultural Research or the Indian Council of Medical Research Council of Scientific and Industrial Research and which is approved by the prescribed aut"? asa National Laboratory. {eit Expenditure on in-house research + A deduction of an amount equal to 150% (#4 ‘Assessment Year 2018-19) of expenditure incurred by a company on in-house researe) development facility shall be allowed. However, the deduction is not admissible if the e*P ture is incurred on land or building. {Sec. 3528) Note: Wef. Assessment Yenr 2021-22, the deduction shall be allowed 100% instead of 150%. GA. Capital Expenditure to obtain the right to use spectrum for telecommunice services. (Sec. "The provisions are the same as discussed in point 7. (see, 588 an ae Scanned with CamScannerol * busing year ductir any right to operate telecommunication ess to operate telecommunication services and for which payment has actually been ‘on in equal installments over the relevant (Sec. 35ABB) the previous years’ meang : he . pelle tion norvienpad before the commencement of the business Jo f “rvices, the previous ye, ‘ . © previous yer in wwhich auch Business commenced, ius Years beginning with the previou: or case, the previous years bwin: any other case, n Years beginning with the previous ye once fee is actually paid, ‘ginning with the previous year in which the J the subsequent previ q we . Hous years during which the a gin ORCC ® ustration 1 . P x Ltd. is engaged in providing telocommuni ;sinto an agreement on 1.4.2018 with the ters licence, for which the is paid, shall ' ication services in India. oie the Department of Telecommun: ion, Government ‘india. AS per the agreement, 'X’ Ltd. is given a licence for providing telecommunication enices in M.P. State for a period of 10 years from 1.4.2018. Licence foes are fixed at 2 13 lakh sable in two equal installments on 10.4.2018 and 10.4.2019, Assuming that the two install- pats are paid by °X’ Ltd. on due dates, find out the admissible deduction ws 35ABB for the prvious Year 2019-20. The business commenced during the Previous Year 2018-19. solution For this purpose, it Duration of licence 10 years Deduction for the Previous Year 2019-20 : V10th of % 9,00,000 Voth of & 9,00,000 ‘2clusively for the purposes of any specified business earried a by him during the previous Which such expenditure is incurred by him, (See. 35AD) ¥ capital expenditure in respect of which the payment or aggregate of payments made “Person in a day, otherwise than by an account payee cheque drawn on a bank or an account thes 29K draft or use of electronic clearing system through a bank account or through such ted clin ibe! electronic modes exceeds ten thousand rupees, it shall not be allowed as a ion, The ded hj ‘uction shalll be allowed during the previous year in which he comme 's Specified bust nces Operations: ea he t of its operation; and “xpenditure is incurred prior to the commencement of its operation; ‘mount is capitalised in the books of account of the assessee on the date of ncement of its operations. ibed by as with offect from Ist January, 2020 : () Debit Card powered by RuPay; Anterface (UPI) (BHIM-UPD; and (ii) Unified Payments Interface Quick Response Cade (UPL Code). iy Scanned with CamScanner“vos otf ut [ouuDYD “oneBjan ao vod puvu ‘ekeauoyem puta uodi0 “od » (p) | ‘uioqsés quowosieuew eum pros 40 WayEks OBez04o8 | ap ved [0389q05 ue Bu;Eq soRLARDe JoMjO 10 Sutsnoy SurpM ‘tuopsts es 30 a8ptuq “peo. _eajot pute Bunposodo ‘Burdoyon seasnq oof OPNIOUToste [EUS SSH a SouMpEyNUTEE UORBOLEGES JoseAK sojonpU | ‘ato uodt Jo toR|mrodsue} ox 30} ou | p10g'FT 2940 40 uo uorezodo #31 30 yodap sour 10 uo woryeiado sy ‘ssoutsng payoods | pu Bmog 017 £q paynou puv quowussA0N ayeIg vAUaUTEZDAOD [eIU9, Hooy alqeproye soy owoyos v sapun yoofoud Bulsnoy v Se § TLOG'P'T 4aye 40 wo woresodo sy: soouourtuo9 4 ay3 paps sony op epnjour osre [[eys ssoursnq poyroods v ‘er-eTOg 4094 jwows Fr wounuaa0g aig ¥ 40 JexUED OM £q pourey uOE TOE: Ss 2g owayps v zopun yooford Bursnoy w Zurpling pue Bu 1 Scanned with CamScannerog sa 09 a a “woe om uoqouo oy a0 song Se : a7 ape ween J ese STS nus Seep pmo og ree osszest ond 8 POS eer peas wossad ovs0u02.00% 1 7 (ase=5) ade engi OHO J La ER Eee ey rams v go voranpop v pose og TENS 8200 ‘PAVE 9 TT gamour code: to cBupng 30 pe Ajo 4609 O49 HUIPUND) oT ys cup uo 21m otal « " poafoad pu? sap II?! zy ee -aanyypuedxe yons. quounesossy amp gy) 091 0 yonbo ns vjo wasHNpaP 9 Power SA NEE Fe tants anaouse uo espns Kav 0041 290528 (0088 5) 2 a uoqeuayea youny|MOpIBD WO aAMyPUody Gy pang worporpeag S00 [CUOE erase renuag ap 4q pogo pur dns) 10 1972494 wat -azonop qeua5 exp a poou paw datos) yuoundozasog rma 70} Pun UL © cyoose 25) Toy wns Av S&ud OY aOss06roT See eS eonanpap soot “voy sp zopuc : Pung wuoudojazcl PAM OF waNAEDA -ssouysng pogils ar | jo oaous ox yeuteBo oa9s pure prensoy pops oq und 9f S80] poquosquu Aue S| 9K) ome vex 225) See sas vy yorum ang crvge sm wonanpop 25 age 30u st Yor eassoy v 30 IO JON Peiagosd os aeureze ors oq weo petdsog, au Jo eq04 ou v WO¥y Sym womanpap 205 ager 29309] 9 ‘graye 30-798 ag weo ssouteng paged sssauysng paytoads ¥ JO exune 0 ¥109 €u0}296 Zapun pur YYOT woH22s z9pun pomoyqe oq jou [TOYS WOHINPE ‘avs pu quewn Gone jo eiuno208 Scanned with CamScanner18 company in afin 7 ps) gr demerger of an undertaking : Where aia, 2 exlusively for the purposes of amalgamaiz, ed a deduction of 20% of such expenditure ax, ‘year in which amalgamation ot dey (Se : Where an assessee pays any sum oan eae his voluntary retirement, he shall be alow ‘ach of five sucessive previous years begins r= red. (See 3h, amalgamating eompany;or(i)demerged op c(i) a frm or prop cession, oF (iv) a private company or == public company is succeeded by’ li Emalgamation, deme sun of any premium pad in respect ofinsuron 6, rn af stocks oF stres aed for the purpose of bse" a8, oe e ‘cooperative society is allowed as deduction. Scanned with CamScannerhe assessee as an employer by way of fund is allowed as deduction. mn allowed is in existence in (See. 410) Scanned with CamScanner‘ranch of a scheduled bank or a non-scheduleg a brane tant mor than 10,000, according ot owed a further deduction foran amount not xceng ing, see ith n scheme framed by the Ceotral Gvema sea income under the head "Profits and Cains Bat, deduction shall be allowed regard reserve created by a specified Speci by a specific ee ‘special reserve created and maintained by im of Deduction : ‘of the profit derived from el ‘edited to the sj ‘hichever is less. the Special Reserve beams es, ied in See, 2(72) of the Companies Act, 2013: is a publie sector company; or ng finance company. long-term finance for the construction or purchase of houses in Inés residential purposes. (©) Any other financial corporation includi pany. ‘Provides long-term finance for the development of infrastructure facility in advance which is not : 6 ‘Any expenditure bonafide incurred by a compat its employees is allowed & lowed as a diy s ofa capital nature it ‘ Iments commeneing from the previous year in whi ‘The unabsorbed part of the capital i i is edi” sun ne snort s capital expenditure on family planing is tre! ws ance coo aeianaspanyonromingtany nose a On capital expenditure Ga cantal expenditure for promoting family planning amongst his employees, he nent! Note: Scanned with CamScannertaza ne at suit ze hae Boo comput sre eA ee tm cri Busine i) The amount of expenditure in. of manufacture of sugar, for: than the pricy curred bya cooperative society, engaged in the business Purchase of sugarcane ata price which neal tos ie irthis head 6) The expenditure should not be of the n fi) Itshould be in respect of a business or he day to day ges for breach of contract. rein defending» oe fe Se ceueton wih alae ed yaid and © of value addo Scanned with CamScannerneces, ine or aa TOPPER, terminate a disadvantageous trad resist a winding-up petition by some eee 4) Legal expenses incurred by a director of a company in defending a suit brought agi:. him to challenge the validity of his election as a director, as it is incurred to save his i=, interest on unpaid purchase price of any business assets purchased by an asses: ‘use will be allowed. Expenditure incurred to oppose nationalization or to prevent the extinction of buss Morgan va. Tata & Zyle Led, (195) 25TT Inder executive instructions, the cost of installing a new telephone. formal advertisement expenditure incurred to maintain the sales not coverei? irector of a company in liquidation for compounding mises im by the liquidator. sure incurred by the assessee. syment of excise duty. ‘uarantee fee paid to the Government for a loan obtained for the purchast! _ (24) Expenditure incurred in connection with alterations made in the Memoranda Articles of Association of a company ifthese alterations are warranted by the changes Companies Act. (Ctr va Elphinstone Spinning and Weacing Mill Le 95) (25) fan assessce stands surety forthe debt of another and its usual in this trade'o; debts, any payment made as a result of such guarantee may be allowed as a business los. (26) Professional tax levied by local authorities the payment of which is a neces condition for the carrying on the business within the area of a local authority. (20 Rebate granted by co-operative stores to their members on the value ofthe pur made by them, a Scanned with CamScannerPROFITS AND GANS OF BONERS Gr PORE ‘assets purchased on hire-pur- red on inauguration ceremony spenditure incurred on a foreign tour of directo red company is allowable, of chairman-cum-managing director accom [Expenses incurred on a foreign tour of wi lowable. irposes of expansion of business jablity to pay debenture premiu ‘and date of redemption. — \Wational Engineering Industries Le, va. CIT (1909) 96 ITR 87 (Cal. under Tatkal Telephone Deposit Scheme. rable Lose! ich are directly incidental to the business or profession of the assessee are tal to the business and is, therefore, allowed. y loss due to a robbery in a bank will be allowed to maintain some eash outside the strong room for payments. ©) Embezzlement, Theft, ete : The loss of money due to embezzlement by an employee ‘ding tho flan of the buarness while discharging his oficial duties is allowed as deduction. "deductible when discovered, (Tadelom G. Deorkanath & Co, 1 EXPENSES EXPRESSLY DISALLOWED 1D Disa srtisement in any souce! lowance of emeruseo om advertise Sore TARY empencit a arty, aball not bea ae th ‘pets oa M. jecioes hall ote deducted ia fespeeualy prov Scanned with CamScannerny subsequent ue ‘he due date spec” in computing ees Government :(a) Any amount paid by way of royalty lex | by whatever name called, which is lez appropriated, whether directly or indirectly, () any amount wh 1 ‘the State Government, shall not be allo from a State Government undertaking by as a deduction. ii) Salaries Payable outside India or to a Non-resi tax has not been paid thereon nor deduct payments m (W) Tax on perquisites of the employee: Any tax act of perquisites provided to an employee which is exempt ws 10(10CC). > (B) In the case of any partnership firm (se. 40 @ Any payment of salary, bonus, commission or remuneration made by the firm 5 partner of the firm, who is not a working partner, shall not be allowed as a dedoc ‘working partners will be allowed as a deduction, only fis ‘accordance with the terms of partnership deed. Iti fut of partners deed will not have retrospective effect 8 e respect. ii) Interest ‘a maximum rate of 12% simple iter However, it will be allowed onl ith ithorised by and is in accordance ™# ert lt of salary, bonus, commission or remus: (iv) In the case of working partners. 3¢ allowed as a deduction subject to the fl partners taken togethe ( On the first 7 3,00,000 of the book-profit or case of a loss og © achat chever is mor® Gi) On the balance of the book-profit @60% sl Scanned with CamScannershown in the profit and loss sreased by the aggregate amount ifsuch amount has been deducted in the business of the firm. ther than a Company or [Sec. 40(ba)] purpose, relative means the husband, wife, brother or sister or any lineal lescendant of dual who is the assessee. The associate concern is rest in the business of the taxpayer or in which the taxpayer [See. 40A(2)] is in cash : Any jture in respect of which payment or aggregate of oe riade to a person in a day is made exceeding ¥ 10,000 otherwise than by an account settheque drawn on a bank or by an account payeo bank draft or use of electronic clearing reesthrough a bank account or through such other prescribed’ electronic modes it will be owed, However, where the payment is made for plying, hiring or leasing goods carriages, the limit ‘éalowance shall be exceeding ® 35,000 instead of exceeding ® 10,000. [See. 40A(3)] sshexpenditure in any subseque ‘ead to be profits and gains of business of the year in which the payment is made. (See. 4040] Exton: i ‘even ifthe payment in cash exceeds & 10,000 or ¥ 35,000 "ecu may © Payment 1 towns where no banking facilities are available ere. Payment made to a cultiva ‘or producer for purchase of agricultural or forest or the produce andy Gnchuding hides and skins) or dairy or fs or products of horticulture or agriculture or ® Payment made to ‘) Payment toan employee o (y SuBPensation, ete where the agereea ment is made to Government an‘ yy fer, (Rule 6DD) fs aaa a desu, 200: () Debit Carl povered by RaPay Steps Pree by, GBDE SP ui Wale Parents Itertes Quick eeponse Cote UP et Gain GHICUPL QR Code). Scanned with CamScannerwident fund or statutory pr oranap ty fund or towards pension scheme on neem ing expenses, losses and allowances areal ‘business or profession enses of proprietor or partners. To reserve except transfer to reserves as provided in htc ly for the purposes of the basin wgement of law. ture of sharing the profits to the sole wy firm on life insurance policies of its partners. Expenditure incurred in violation of another statute. UCIT vn Inia Cement Ld, (2000) 244 ITH 23 (xvii) Gifts made on the occasion of marriages in the families of friends and others with *>= e assessee has business dealings cannot qualify as business expenditure ee = ‘grounds of commercial expediency, (CIT vs Jeewandas Lale & Sons (3900) 157 CTR DEDUCTIONS ALLOWABLE ONLY ON ACTUAL PAYMENT (Se ‘The following deductions are allowable only on actual payment : (a) Any sum payable by the assessee by way of tax, duty, foo, () Any sum payable by him as an employer by way of contribution to any providest fare of employees: (© Any sum payable to an employee ag bonus or commission for services rendered"), such sum would not have been payable to him as profit or dividends it had not beea bonus or commission. oA @) Any sum payable by the assessce as interest on any loan or borrowing from any P2 Financial Institution ora State Financial Corporationor a State Industral Investment CoP, (e) Any sum le ssee as an interest to a scheduled bank or a co-0P*",, ‘other than a ri credit society ora primary co-operative agricult™¥, i develpment bank, on an advance from a scheduled bank or a co-operati¥ | (9 Any sum payable by the assessec in lieu of earned leave, Scanned with CamScanner‘owed as a deduction in an earlier year and thereafter sind Subsequently the successor in business has realised any ‘penditure, the amount shall be deemed to be profits chargeable cash and not money's worth, by Insurance Company, the benefit derived from reinstate (CIT ox. Kasturi & Sone Ld. (1989) 257 TTR A eee cari sae oer in seg a ess or profession Sees. 176(3A) and (4)] = eee mln poy yuan ny sum i eorered deel be echoes a (@) fvebeen chargeable to tax. ISee. 4144)) withdrawal from Special Reser’, 1 eservocreatedtand maintainedby especineg segihewanyama ge vhrawn Fo ee re Shargeable fs ofthe rove yer ‘Section. 36(1X viii) it shall be: Scanned with CamScanner