14 December 2010
Can the donation given to non political local organizations be allowed to be deducted while computing PGBP if it is proved that these were incidental to the business?
The donations were given to local parties and organizations to maintain good relation and harmony. The business is in a sensitive locality and it’s not good for the business to make these organizations unhappy. Thus for the smoother and better running of the business, the donation was given. These expenses were incurred on the decision of competent authority to avoid any possible losses that might occur by enraging these local non political organizations.
14 December 2010
One needs to prove that the non payment would have damaged the buiness and for saving the buiness the donation is given. if one can prove this with documentory evidence, the expanditure shall be allowed u/s 37(1) of IT Act.
CAclubindia
