Is Bribe allowable expenditure????

Page no : 3

HARISH SP (STUDENT) (72 Points)
Replied 07 October 2010

IF IT IS ALLOWABLE THEN LOSS TO GOVT NOT FOR CLIENT

CA.G.Muguntha Narayanan (Internal Auditor at TVS Motors) (2195 Points)
Replied 07 October 2010

Mr.Robin,

I am not trying to misuse what is not provided in IT act or any other act here. Thats not my job too. The judgement given by Jusice RANGANATH MISRA IN McDowell case is for TAX PLANNING. that is too generic for the present case u/s.37(1). If u have time, i wud like u to post any case law, which specifies that bribing to non-govt officials is an offence. i have claimed exp for my clients based on the judgements quoted by me above. If u still have doubts, pls go through th heading SECRET COMMISSION from T.N.MANOHARAN SIR BOOK UNDER PROFTS AND GAINS (SEC.37)

Shyamal Mistry (Final Student) (282 Points)
Replied 08 October 2010

According to me, it is disallowed...

CA.G.Muguntha Narayanan (Internal Auditor at TVS Motors) (2195 Points)
Replied 08 October 2010

Dear Shyamal,

With due respect to ur answer, i wud like to give my suggesstion. Your answer is partically correct. It is disallowed when it is paid to govt officials. However, it is not disallowed if it is paid to non-govt officials.

vishal (Article) (49 Points)
Replied 10 October 2010

I agree with Mr. G Muguntha. If explanation to sec 37(1) specifically provides for govt. employees it clearly means that the law makers dont want to include non-goverment employees. Supporing case laws has already quoted by him.

1 Like

Mayur Arora (CA Final) (295 Points)
Replied 11 October 2010

Thanks G. Muguntha for giving case laws and providing us valuable knowledge that paying bribe to non-govt. official is not an offence and hence allowable as an expense in Income Tax Act.

1 Like