ALL OF US KNOW THAT EXPENSES IN NATURE OF INFRACTION OF LAW , OFFENCE OR ILLEGAL ARE NOT ALLOWED UNDER EXPLANATION TO SECTION 37(1).
MY QUESTION IS THAT IF A COMPANY INCURRS SOME LITIGATION CHARGES TO DEFEND ITS DIRECTOR AGAINST CRIMINAL CHAGRES AND ULTIMATELY THE CASE IS DECIDED AGAINST THE DIRECTOR !!
WILL IT BE DEDUCTIBLE ??
i think its an expense related to business so must be allowed.....just coz the suit is lost , doesnt make the expense illegal...
Waiting fr others to comment..
I think yes it should be allowed. Because the expense was to fight the legal suit. So it is independent of the decision of the court.
Case against the director- director's personal expense..
yes it will be allowed surely
If the criminal charges against the Director arises while he was acting for the business, then litigation charges will be allowable. If the criminal charges against him are not related to the business, then litigation charges will not be allowable.
IT SHOULD BE ALLOWED IF CASE WAS DUE TO COMPANY'S BUSINESS
the only thing matters in your question as well said by my above fellow professional friends is that of the nature of expense if it is of personal nature then it will be disallowed and if it is related to the business activity than it will be allowed as expenses
| Originally posted by : Sunshine... | ||
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agree |
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And one more thing the expenses will only be allowed & not the penalty levied by court.
CAclubindia
