Topic
ITAT Mumbai rules that education cess is not allowable as a deduction under Section 37 of the Income Tax Act post the retrospective insertion of Explanation 3 to Section 40(a)(ii). The ruling clarifies that cess payments, even if termed as tax, cannot be claimed as business expenditure, impacting corporate tax computations for prior assessment years.
The ITAT Delhi has ruled that tax authorities cannot disallow business purchases under Section 37 of the Income Tax Act merely because e-way bills were not produced, if the assessee has provided credible documentary evidence including invoices, bank records, and supplier confirmations. This sets a critical precedent for taxpayers in the manufacturing and trading sectors, reinforcing that substantive proof of transaction legitimacy outweighs procedural compliance gaps under GST.
Madras High Court holds that compensation for exchange rate losses qualifies as allowable business expenditure under Section 37 even if not expressly provided in contract.