Related to conyance
This query is : Resolved
13 May 2009
Hi
A company is paying conyance expenses to the audit staff of quality auditors . Now whether this expenses should be shown as reimbursement to auditor or as should be shown as Conyance Expenses. FBT is not applicable on the said expense.?
Plz Reply
A company is paying conyance expenses to the audit staff of quality auditors . Now whether this expenses should be shown as reimbursement to auditor or as should be shown as Conyance Expenses. FBT is not applicable on the said expense.?
Plz Reply
13 May 2009
This reimbursement is not liable for FBT.
the said expenditure can be shown as Conveyance Expenses.
the said expenditure can be shown as Conveyance Expenses.
13 May 2009
The answer to this query lies in the following clarification provided by CBDT in the circular no8/2005 dated 29.08.2005
13. Whether expenditure incurred by a professional like a lawyer or auditor on conveyance, tour and travel, and reimbursed by the client, is liable to FBT in the hands of the client?
The reimbursement of expenditure incurred for the purposes of conveyance, tour and travel is essentially a component of professional fee paid by the client to the lawyer or auditor. Accordingly, such expenditure is not liable to FBT in the hands of the client.
Thus if the expenditure on travels etc of the consultants is booked with the fees for the services head, FBT is not payable without doubt. If the expenditure is booked in travel head, it can not be argued that the FBT is not applicable as the employer employee relationship is not there at a particular expenditure. The employee employer relationship need to be seen at the entity level, not at the expenditure level. Since the company has employees, the relationship has been established, there is no need to look further into the expenditure, whether incurred by employees or not.
13. Whether expenditure incurred by a professional like a lawyer or auditor on conveyance, tour and travel, and reimbursed by the client, is liable to FBT in the hands of the client?
The reimbursement of expenditure incurred for the purposes of conveyance, tour and travel is essentially a component of professional fee paid by the client to the lawyer or auditor. Accordingly, such expenditure is not liable to FBT in the hands of the client.
Thus if the expenditure on travels etc of the consultants is booked with the fees for the services head, FBT is not payable without doubt. If the expenditure is booked in travel head, it can not be argued that the FBT is not applicable as the employer employee relationship is not there at a particular expenditure. The employee employer relationship need to be seen at the entity level, not at the expenditure level. Since the company has employees, the relationship has been established, there is no need to look further into the expenditure, whether incurred by employees or not.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Deemed Capital Gain
- Exiting partner in partnership firm in gst portal
- Type of Capital Gain
- TDS on property - Form 141 query
- F & O PROFIT REPORTING FOR AY 2026-27
- ASMT-10 received from A O
- Loss of interest in PF transfer from EPFO to Trust
- Average Cost Of High Quality Diamonds
- Applicability of Books of Account for Commission Income (Sections 194D & 194H)
- Gst on travel by air for business purposes
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
