https://www.taxtmi.com/caselaws?id=25012 Surtax paid by a company is not deductible under section 37 of the Income-tax Act because it is levied on chargeable profits after income has already accrued. The payment is treated as an application of profits arising after they are earned, not as expenditure laid out wholly and exclusively for business purposes. On that basis, surtax falls outside allowable business expenditure, and the article notes that it is unnecessary to consider the bar in section 40(a)(ii) once section 37 is not satisfied. en-us Mon, 28 Mar 1988 00:00:00 +0530 Sat, 23 Jan 2010 17:39:19 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=25012 Surtax paid by a company is not deductible under section 37 of the Income-tax Act because it is levied on chargeable profits after income has already accrued. The payment is treated as an application of profits arising after they are earned, not as expenditure laid out wholly and exclusively for business purposes. On that basis, surtax falls outside allowable business expenditure, and the article notes that it is unnecessary to consider the bar in section 40(a)(ii) once section 37 is not satisfied. Case-Laws Income Tax Mon, 28 Mar 1988 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=25012