Compensation to workmen in case of death of worker on duty.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 June 2013 IS COMPENSATION PAID TO WORKMEN IN CASE OF DEATH OF WORKMEN AN ALLOWABLE BUSINESS EXPENSE UNDER SECTION 37(1)....??

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 June 2013 In case the Service Contract have a mention about the same the payment or the payment is required to be paid under certain statute, like workmen Compensation Act then it is certainly allowable.
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In my opinion, if the payment is voluntarily given by the employer up to a reasonable extent can also be claimed as a deduction.
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Querist : Anonymous

Querist : Anonymous (Querist)

16 June 2013 ok thank u sir...
Bt my client dont have any such clause in service agreement for death compensation with the employee...

So can he claim such expense as deduction...??

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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16 June 2013 He can claim a reasonable amount paid to the employee as in such a case the employer can very well take the ground of commercial expediency.
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In case of Indian Leaf Tobacoo Development Co. Ltd. Ex-gratia payments to the dependants of former employees have been allowed as expenditure.
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