Search Results For: business expenditure


QUERY: Is there any restriction or limit on refreshment/ gift paid to members whoever attends an annual general meeting? Can it be questioned by the AO?
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In case of listed companies, SEBI prohibits giving gifts to the share holders in AGM. However SEBI permits light refreshment, tea, coffee etc. to share holders in AGM.

Generally, the AO allows the expenses incurred at AGM, if it is reasonable and for the purpose of business.

QUERY: A co-operative bank wants to take accident group insurance for its members. Whether premium paid on the insurance for members can be debited to Profit & Loss account of the bank? Will it be allowed by the Income Tax Department?
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The following conditions should be complied to claim deduction u/s. 37 of the Act.

i) The expenditure should not be of the nature described in sections 30 to 36.

ii) It should have been incurred in the accounting year.

QUERY: The assessee is a partnership firm carrying on medical profession. At present it is carrying on Gynic Branch only for the last several years. It decided to set up 200 bedded multi-specialty hospital and accordingly started the project in May, 2012 under the same partnership firm as a separate unit in order to avail under section 35AD @ 150% of eligible capital expenditure:

(a) Whether this unit can claim deduction under this section though the place of business and the nature of services will be different? No old machinery etc. will be transferred to new building/unit.

(b) Whether the income of both the units owned by the firm will be consolidated for the purpose of applicability of section 115JC or separate treatment?

(c) Can there be any difficulty to claim deduction under section 35AD in case if old unit (Gynic) is also shifted to new Hospital? The new unit may start operation by April-May, 2015.
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a) Yes, the partnership firm can claim deduction under section 35AD @ 150% on capital expenditure incurred for setting up and operating hospital anywhere in India with more than 100 beds for patients. From the fact, it is clear that no old machinery would be transferred to new building/unit, hence, it would not be set up by splitting up or the reconstruction of a business already in existence.