Tuesday, September 27, 2011

Character of an expenditure shall not change merely because

Character of an expenditure shall not change merely because it was spent out of a subsidy amount received from State Government

Income-tax : Expenditure incurred out of capital subsidy sanctioned in favour of assessee by Govt, of A.P on rectification and improvement of power lines damaged due to cyclone is allowable as a revenue expenditure, source of fund being quite immaterial, shall not change nature of expenditure incurred by assessee [Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of] - [2011] 10 taxmann.com 152 (Hyd. - ITAT)(TM)

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