|COURT:||Rajasthan High Court|
|CORAM:||Ashok Kumar Gaur J, Kalpesh Satyendra Jhaveri J|
|CATCH WORDS:||business expenditure, Education Cess|
|DATE:||July 31, 2018 (Date of pronouncement)|
|DATE:||August 23, 2018 (Date of publication)|
|FILE:||Click here to view full post with file download link|
|S. 40(a)(ii): Education cess is not part of tax. Accordingly, the same is allowable as a deduction and disallowance u/s 40(a)(ii) cannot be made. CBDT Circular referred|
That on a plain reading of the above provision of section 40(a) (ii), it is evident that a sum paid of any rate or tax is expressly disallowed by this sub-clause in two cases : (i) where the rate is levied on the profit or gains of any business or profession, and (ii) where the rate or tax is assessed at a proportion of or otherwise on the basis of any such profits or gains. It is evident that nowhere in the said section it has been mentioned that education cess is not allowable. Education cess is neither levied on the profits or gains of any business or profession nor assessed at a proportion of, or otherwise on the basis of, any such profits or gains.