Report No. 12
36. Other deductions.-
The deductions provided for in the following clauses shall also be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28 [main section for income from business]-
(1) the amount of any premium paid in respect of insurance against risk of damage or destruction of stocks or stores used for the purposes of the business, profession or vocation;....
[Insurance of stocks or stores] [Section 10(2)(iv), part for stock etc.]
(2) any sum paid to an employee as bonus or commission for services rendered, where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission, in either of the following cases, namely-
[Bonus or commission to employees] (Section 10(2)(x), main para.]
(i) where the amount of the bonus or commission is reasonable with reference to-
(a) the pay of the employee and the conditions of his service;
(b) the profits of the business, profession or vocation for the previous year in question, and
(c) the general practice in similar businesses, professions or vocations; or
[Section 10(2)(x), Proviso]
(ii) where such payment is in pursuance of the award of an industrial or other tribunal constituted under any law for the settlement of industrial disputes;
(3) the amount of the interest paid in respect of capital, borrowed for the purposes of the business, profession or vocation.
[Section 10(2)(iii), main part]
Explanation.-Recurring subscriptions paid periodically by shareholders or subscribers in such Mutual Benefit Societies which fulfil such conditions as may be prescribed, shall be deemed to be capital borrowed within the meaning of this clause.
[Interest] (Section 10(2)(iii), Expin.]
(4) (a) any sum paid by the assessee as an employer by way of contribution towards a recognised provident fiord or an approved superannuation find, to the extent provided in section 293 [New Section in chapter on Recognised Provident Funds re: allowing deduction for employer's contribution] or section 310 [58R, main para., part re: deduction for employer's contribution] as the case may be:
(b) any sum paid by the assessee as employer by way of contribution towards any other fund created by him for the exclusive benefit of his employees under an irrevocable trust;
[Contributions to certain funds for employees' benefit] [New]
(5) in respect of animals which have been used for the purposes of the business, profession or vocation otherwise than as stock-in-trade and have died or become permanently useless for such purposes, the difference between the original cost to the assessee of the animals and the amount. if any, realised in respect of the carcasses or animals;
[Animals] [Section 10(2)(viii)]
(6) debts, or parts thereof, that are established to have become bad debts in the previous year, provided-
(i) such, debts or parts of debts-
(a) have been taken into account in computing the income of the assessee of that previous year or of an earlier previous year, or
(b) represent money lent in the ordinary course of the business of banking or moneylending which is carried on by the assessee; and
[Section 10(2)(xi), main para.]
(ii) such debts or parts of debts have been written off as irrecoverable in the accounts of the assessee for that previous year:
[Last words of section 10(2)(xi), main para.]
Provided that if the amount ultimately recovered on any such debt or part of debt is less than the difference between the debt or part and the amount so deducted, the deficiency shall be deductible for the previous year in which the ultimate recovery is made:
Provided further that any such debt or part of debt as is referred to in sub-clause (i) may be deducted if it has already been written off as irrecoverable in the accounts of an earlier previous year but the Income-tax Officer had not allowed it to be deducted on the ground that it had not been established to have become a bad debt in that year.
[Bad debts] [Section 10(2)(xi), proviso, latter half]