Decuction under Income tax act of Exp.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 October 2010
Sir
A Pvt. CO. give warranty for goods sold by it @ 5% of the value of goods.So it make provision in books for it as on last date of the Financial year.Please tell me whether this provision is allowed as an expense under Income tax Act.My view is it should not be allowed since provisions are not allowed under the income tax act.Please Clarify the doubt with relevent sections.
A Pvt. CO. give warranty for goods sold by it @ 5% of the value of goods.So it make provision in books for it as on last date of the Financial year.Please tell me whether this provision is allowed as an expense under Income tax Act.My view is it should not be allowed since provisions are not allowed under the income tax act.Please Clarify the doubt with relevent sections.
12 October 2010
Provisions are not allowed.
The general expenditure is covered u/s 37(1), as per this sec expenditure should have been incurred in the previous year.
The general expenditure is covered u/s 37(1), as per this sec expenditure should have been incurred in the previous year.
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