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
- Reopen of assessment proceeding
- Is any professional CA is here please reply
- EPF FULL & FINAL RULES IN 2026
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- Reprocessing of rectification order AY 2025-26
- FTS Taxable under 115A
- Rental income gst and it purpose
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Putting a heading on received mail
- COMMERCIAL INVOICE FOR MATERIAL AND FREIGHT
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
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
