Business and profession
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 January 2013
Is Ransom paid to freed the kidnapped director an allowable exp under the head of business and profession
CA PARAS BAFNA
(Expert)
08 January 2013
A director is a Key person to run the company and if ransom is paid for getting him free, that may be allowed as business expense.
.
Practical difficulty in this regard may be faced as it becomes very difficult to prove the genuineness of the activity of kidnapping. It is true that Kidnappers do not sign on payment vouchers as a token of Receipt.
.
To lodge an FIR with the POLICE in such a case may put the life of the director in danger.
.
The department may not accept the clues or explanations of the assessee Company and may not believe upon the story EASILY. The story has every chance to take a twist here. A new episode may start to settle the case in your favour and unluckily you will not be able to claim unofficial expenses to Officers in your company's return.
.
.
Practical difficulty in this regard may be faced as it becomes very difficult to prove the genuineness of the activity of kidnapping. It is true that Kidnappers do not sign on payment vouchers as a token of Receipt.
.
To lodge an FIR with the POLICE in such a case may put the life of the director in danger.
.
The department may not accept the clues or explanations of the assessee Company and may not believe upon the story EASILY. The story has every chance to take a twist here. A new episode may start to settle the case in your favour and unluckily you will not be able to claim unofficial expenses to Officers in your company's return.
.
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