Business   

Is expenditure on ISO certification deductible?

It has become fashionable as well as a necessary requirement to get ISO certification for factories and business houses to command better public image in the market. Is such expenditure deductible as revenue expenditure?

ISO certification ensures that the business, which is certified, is well equipped in a manner that it functions most efficiently. There is no asset of enduring nature acquired by such certificate. Even if there be any enduring advantage, such advantage is in the revenue field, so that there should be no objection in getting it allowed under Sec. 37 of the Income-tax Act as an expenditure wholly and exclusively incurred for purposes of business of the assessee. Similar expenditure incurred for advice on individual and financial matters has been found admissible in CIT v South India Sugars Ltd. (2005) 275 ITR 491 (Mad).

S. RAJARATNAM

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Bright prospects for key sectors: Fitch
RBI policy and rupee-dollar enigma
Paradoxes in external and internal sectors
Computation of capital gains on inherited property
Is expenditure on ISO certification deductible?

Copyright © 2007, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu