Allowable expenses or not ?

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Prakash Jasani (Querist)
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04 June 2008 Dear Experts,

1)Any expenses claimed by the assesses (i.e. Individuals/Firms/Companies),but suppose any bills is not in the name of assessees but in the name of Individual/Partners/Directors
(in bills address is mentioned residents as well as office) then this type of expenses is allowable as per I.T. act.? under what section?

2)Any expenses claimed by the assessees (i.e. Individuals/Firms/Companies),but suppose any bills is not in the name of assessees neither in the name of Individual/Partners/Directors (in case of leave & licence place or vice versa),then this type of expenses is allowable as per I.T. act.? under what section?

Pls.solve my query asap.

Regards,
Prakash Jasani
4th June 2008

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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04 June 2008 1) if address is of residence of directors/ partners, u may need to prove its authencity as business expenditure (ITO will argue for it being personal exp.). others will allow.

2) not clear to me. if it is leave, how will u get the bill? if there is a bill, it will be certainly in name of anybody.

if there is no bill at all, exp. of small amounts having this type of nature that bills are r not issued like conveyance exp. paid to auto, will be allowed. for big amounts, u may be asked to present receipts.

chetan soni

chetan soni (Expert)
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05 June 2008 1. If the expenses of personal nature, then this will not be allowed in any case. In case of other expenditure you will the deduction of expenses.

2. If the bill is not in the name of company or any director & you have leave & licence agreement. Then bill will be in the name of the landlord and there is sufficient relationship to prove that this is business expenditure.

I hope this will resolve your quries.

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