FBT on Tour-Travel, Hotel/conveyance in toured city,

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RV (Querist)
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20 March 2009 This question has been asked many times in this forum, but no concrete answer has been provided. Also, there is no majority opinion that can be taken as guidance. Lets us take expenses incurred by a company in Chandigarh on an employees's trip to Delhi.

1. Ticket to Delhi and Back.
2. Auto and taxi expenses in Delhi.
3. Food Bills in Delhi. (Employee welfare).
4. Hotel bill for stay in Delhi.

Is there any calrification from Income Tax department if in such case, expense number 2,3 and 4 can be clubbed with expense 1 to be covered under 115 WB (2)(Q). What is the respected opinion of experts in this case.

Thanks.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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20 March 2009 As per my knowleadge there is no such specificationfrom IT deptt. better to keep them seperate if you can not proof their individual spending i.e. if you can show the invidual breakup of each expense then you should not club 2,3,4 with exp 1.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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20 March 2009 please see by this link
it will helpfypp to you
if hotel bill in the name of employee no FBT is applicable.

http://www.scribd.com/doc/6685610/FBT-CHART

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HUZAIFA HUSSAIN

HUZAIFA HUSSAIN (Expert)
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20 March 2009 IN MY OPINION EXPENSES 1 & 2 SHALL BE TAKEN AS TRAVELLING EXPENSES ON WHICH FB RATE IS 5% AND EXPENSES 3 & 4 SHALL BE CLUBBED AS BOARDING & LODGING ON WHICH THE RATE OF FB IS 20%. SO U CAN CLUB EXPS. 1& 2 UNDER TRAVELLING AND 3&4 CAN BE CLUBED AS B & L EXPS.

RV (Querist)
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20 March 2009 Thank you all for your inputs. If you search the forum, you'll find an entry which says that as hotel and lodging etc o tour have not bee specifically excluded form (2)(Q), the benefit of doubt goes to assesee. So 3 & 4 can also be clubbed under (2)(Q). Pls comment and keep this query open for others to comment. Thnx.

Tushar Yerawar

Tushar Yerawar (Expert)
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23 March 2009 Its better to keep them seperate.
This should be done in following manner.

1. Ticket to Delhi and Back - Tour and Travel

2. Auto and taxi expenses in Delhi - Conveyance
3. Food Bills in Delhi. (Employee welfare) - Hospitality services
4. Hotel bill for stay in Delhi - Lodging and boarding.

It is always that special provision in act overrules general provision.

According to me as the nature of the item is specifically mentioned in each of the subsection we should categorised them under the subsection which gives them there essential character.