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Introducing the “In Favour Of” filter in Case Laws.
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of <h1>Higher Profit Deductions Allowed: Disallowed Expenses Linked to Business Activities Qualify Under Chapter VI-A, Say Courts and CBDT.</h1> Chapter VI-A of the Income-tax Act, 1961, allows for deductions on certain incomes. Disallowances by Assessing Officers, such as those under sections 32, 40(a)(ia), 40A(3), and 43B, can increase profits, raising questions about eligibility for higher profit-linked deductions. Courts have ruled that if disallowed expenditures are related to the business activity for which Chapter VI-A deductions are claimed, the enhanced profits qualify for deductions. This position, supported by several High Court judgments, has been accepted by the Central Board of Direct Taxes. Consequently, the Department will not pursue appeals on this matter.
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