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Payment to police & 20,000 for protection

Lalit Nyati (Student) (487 Points)

14 July 2012

can Income Tax department allow payment more than Rs.20,000 in cash pay to Police department for protection to Intimidate..

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17 Replies

Joey Tribbiani (fdg) (2010 Points)
Replied 14 July 2012

Illegal payments are not allowed under any circumstances

M. N. JHA (CA) (8316 Points)
Replied 14 July 2012

Take receiept from police then it is allowable otherwise illegal payment not allowed for deduction.

CA Amit Jaiswal (Finance Manager) (2720 Points)
Replied 14 July 2012

In this case also the deduction will not be allowed.

CA Amit Jaiswal (Finance Manager) (2720 Points)
Replied 14 July 2012

For claiming deduction, you will also be required to deduct TDS (if applicable). Further, the amount cannot at all be given to police in black so as to claim it as security expenses. Further, they will not take the amount in white.

CA Sanjay Bag (CHARTERED ACCOUNTANT) (3340 Points)
Replied 14 July 2012

These types of expenses are not allowable at all in Income Tax.

Prashanth (Chartered Accountant) (2322 Points)
Replied 14 July 2012

Hi,

Refer this

Payment of Protection Money to Rowdies & Police: In the another landmark judgment decided by Karnataka High Court that any payment to police or rowdies for getting protection from them is illegal and should not be allowed. Refer CIT v Neelavathi & Others 322 ITR 643 (2010).

2 Like

CA Lokesh Pokharna (CA (Ahmedabad Bhilwara Chittorgarh)) (4128 Points)
Replied 14 July 2012

its a illegal expenses, given which is not required to give under government act....... so no question it\ will be disallowed.

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To whom it is needed - saving karthik

*RENU SINGH * (✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ ) (21627 Points)
Replied 15 July 2012

undoubtedly illegal expense ...

and hence not allowed as deduction. simple logic

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 15 July 2012

i dont think IT department.. will allow these payment as deduction otherwise everyone will take this advantage to save their taxes...

CA. Aabhishek Khurana (CHARTERED ACCOUNTANT) (364 Points)
Replied 15 July 2012

ABSOLUTELY NOT ALLOWED

CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 15 July 2012

Not Allowed,

HOWEVER DO CLAIM IT BY TAKING A FAKE BILL FOR ANY EXPENSE,ie , ADJUST UNDER ANY EXPENSE HEAD.

inderpreet singh (Audit/Accounts assisstant) (47 Points)
Replied 16 July 2012

undoubtebly this payment is not allowed under37(1). However ransom money paid to free director is allowed as per CIT VS khemchand motilal tobacco products(p) ltd(madhay pradesh)