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Income Tax - Highlights / Catch Notes

Home Highlights November 2018 Year 2018 This

Travel expenses claimed as a deduction from the technical ...

Income Tax

November 26, 2018

Travel expenses claimed as a deduction from the technical know-how fees - claim prohibited by Section 115A(3) - specifically prohibited expenses cannot be allowed.

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  1. Nature of expenses on Technical know-how fee - such technical know-how was used for the purpose of manufacturing the existing items - held as revenue expenditure - HC

  2. Payment to overseas institution as fees for awarding the degrees, supplying books and course material – There is no transfer of any technical know-how or technical...

  3. Royalty & lump sum fee – The payment of lump sum fees for the technical know-how and the royalty is allowable as revenue expenditure - AT

  4. Disallowance of foreign travel expenses - there cannot be double claim of same expenditure, one in the hands of the assessee and another in the hands of the sister concern - AT

  5. Discontinued Business - Disallowance out of depreciation and disallowance out of travelling, repairs, insurance expenses – expenses incurred to protect the business...

  6. Allowable revenue expenditure - treatment to the travelling expenses of the Director's wives as well as fees paid for professional service - Allowed as revenue expenditure - HC

  7. Disallowance of depreciation on technical know-how - principle of consistency - the entire expenses directed to be treated as capital in nature and depreciation be...

  8. Disallowance of one-third of directors’ foreign travel and conveyance expenses - If the object of the undertaken tour is commercial in nature, the expenditure would...

  9. TP Adjustment - Addition as ‘Fees for Technical Services’ ignoring the assessee’s contention that it was purely reimbursement received for Construction and Management...

  10. Grossing up of the expenditure with TDS amount for claiming deduction - Non reimbursable tax paid to Master Cards/Visa Cards included under the head “Operating Expenses“...

 

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