2023 (12) TMI 452

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....aken four grounds of appeal. However, its grievances revolve around a single issue, namely ld. CIT(Appeals) has erred in confirming the addition of Rs. 1,00,00,000/-, which was made by the ld. Assessing Officer by disallowing an expenditure of Rs. 1,00,00,000/- paid to M/s. JK Tyre & Industries Limited. 3. Brief facts of the case are that the assessee-company at the relevant time was engaged in manufacturing of automotive rubber tubes and mixing of natural rubber compound on job work basis and on production. It has filed its return of income on 30.09.2013 declaring income of Rs. (-)2,32,09,879/-. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) dated 05.09.2014 was issued and served upon the....

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.... 1 appended to Section 37 has a direct bearing on the controversy, therefore, we deem it appropriate to take note of this Explanation, which reads as under:- "Explanation 1:- For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence of which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure". 7. A perusal of Section 37 would indicate that it is a residuary provision for permitting the assessee to claim expenditure but such expenditure should not be in the nature described in Sections 30 to 36 and it should not be in the nature of ....