Query on "profits and gains from business or profession"

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Rashmi (Querist)
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07 October 2012 Dear Experts,

I have the following queries in my syllabus, kindly help me in solving this.

Q) State with reasons whether the following expenses are admissible as deduction while computing "profits and Gains from Business or Profession".

(i) Traveling expenses of Rs. 20,000 incurred by a director on a tour to USA in connection with negotiation of purchase of a new machinery.

(II) Interest paid to bank Rs. 15,000 in connection with overdraft obtained for paying dividend.

(iii) Rs. 20,000 were spent in the previous year in connection with statutory income tax proceedings.

(iv) An expenditure of Rs. 20,000 incurred towards cost of neon signs fixed on office premises for advertising the products of the assessee.

Thanks in advance.

Rathin Roy

Rathin Roy (Expert)
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08 October 2012 All the above expenses are allowable - as regards item number 3 there must be a bill from a consultant or advisor or specific expenses like xerox expenses etc. - amount paid in cash (if any) needs to be supported by a bill or claim e.g. travelling or conveyance bills.