Assessee-company discharged guarantees given for repayment of loans raised by its subsidiaries and their business associates and claimed same as business expenditure\u00a0 Claim was disallowed by assessing authority as well as by first appellate authority on ground that offering guarantee was not out of business necessity but was more by way of a gratuitous undertaking as there was no legal compulsion on part of assessee to honour such guarantees. On appeal, the Tribunal allowed assessee’s claim, holding that the amount was paid by the assessee as part of discharge of its accumulated obligations High Court held that each and every expenditure incurred cannot be characterized as a legal obligation and a necessary expenditure incurred by the assessee, when it has a remote proximity to the business necessities of assessee. In the absence of any supporting material or reasoning given by the Tribunal to reverse the well-reasoned finding of the assessing authority and first appellate authority, the Tribunal’s order could not be sustained. Since the decision of the High Court was legally correct and justified, the civil appeal was dismissed.\u00a0 (AY. 1996-97 & 1997-98)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 37(1): Business expenditure-Guarantees given for repayment of loans raised by its subsidiaries and their business associates-In absence of any supporting material-Not allowable as business expenditure-Order of High Court affirmed. [Art. 136]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-65214","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-gXQ","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/65214","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=65214"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/65214\/revisions"}],"predecessor-version":[{"id":65215,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/65214\/revisions\/65215"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=65214"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=65214"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=65214"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}