10 January 2009
Dear Sir purchase in the case of trading business and direct cost in the case of service industry, is it allowed as deduction u/s 28 itself or as expenses u/s 30 to 37 of Income Tax Act? Suppose Sales 100000, Purchase 80000, gross profit 20000, Salary 10000, net profit 10000, In this case in which section Purchase Rs. 80000 will be allowed as deduction? Is it allowed u/s 28 or u/s 30 to 37? In my opinion role of section 30 to 37 comes after gross profit, Direct cost should be allowed in basic definition of business income given in section 28. Is it right or wrong?
CAclubindia
