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Jaya (Querist)
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29 February 2012 Our client is a Pvt Ltd Co. dealing in Providing Road Transport business.Some Expenditures are incurred in the form of business promotion where they give gold and diamond jewellery items to their customers which amounts to Rs.300000 for F.Y 2011-12. Whether these expenditure is allowed under Income Tax Act? If not how should the above amount be treated?

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Guest (Expert)

29 February 2012 The above expenditure will be allowed if the supporting documents are available with client and also its payment do not violate any other provision of Income Tax Act.

CA. Hari Kishan

CA. Hari Kishan (Expert)
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29 February 2012 The expenses towards business promotion shall be allowed provided that you could establish and demonstrate that such payments made are purely for conducting and in the course of the business and that the people to whom paid have provided good business to the company etc.

Jaya

Jaya (Querist)
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02 March 2012 Thanks for the information. Can you specify the provisions of the Income TAx Act which amounts to violation?

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