« Top Headlines » Open DEMAT Account in 24 hrs  Income Tax Calculator FY 2023-24: How To Know Your Tax Liability Online On IT Dept's Portal?  BackBack Income Tax Act amendment on cards on tax treatment of MSME dues  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing. Check details here  Income tax slabs FY 2024-25: Experts share these 8 benefits for taxpayers in new income tax regime  How To File ITR Online - Step by Step Guide to Efile Income Tax Return, FY 2023-24 (AY 2024-25)  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately «  Field levelled for deposits... Budget '07: It's time to talk to commerce ministry... » Corporate social conscience August, 07th 2006 This is with reference to "Corporate social conscience" We need to study Section 37(1) of the Income Tax Act 1961 to understand the concept better. Section 37(1) accommodates all deductible expenditure other than those specifically covered by other provisions. Also, it is impracticable to list out all the deductible expenditures. One of the components of this section is "any expenditure laid out or expended wholly or exclusively for the purposes of the business or profession." This means that there should be a perfect nexus between the expenditure and the business if deduction is to be claimed. It is important to also understand a concept called commercial expediency. This means that certain expenses are allowed as deductible even though there may not be any specific provision in law allowing the same. For example, mamool given in places such as dockyard, railway stations, etc., are allowed considering the practical functioning of the business. Strictly speaking, there is no provision in law that says that they should be allowed or disallowed. Based on the same principle of commercial expediency, several expenses have been considered in favour of assesses. For instance, in CIT vs Heyward Waldia Refinery Ltd (1992) 209 ITR 159 (Cal.), the company presented watches to employees to encourage them to maintain timely attendance. It also enhanced the goodwill between the employer and the workers. A. N. V. Ramani Chennai