Profits and gains of business profession-Chapter1
Chapter 1 Profits and gains of business profession I. Along with reasons state whether the following expenses are admissible or inadmissible 1 .Travelling expenses including a sum of rs.15000incurred by a director for travelling abroad for negotiating the price of plant and machinery It is a capital expenditure and hence disallowed 2.Amount paid to the union leader to call off the strike As it is paid against public policy it is disallowed 3.Compensation paid to an employee for termination of his service As it is paid in interest of business it is allowed 4.Loss due to embezzlement by an employee Allowed as it has been incurred during the course of the business 5.Interest paid for funds borrowed for purchase of building rs.5000 It will be capitalized from the date of borrowing till the date of asset put into use 6.Purchase of land for the purpose of research rs.4,00,000 Disallowed as per section 35(2) 7.Fee paid to the lawyer Rs 10000 for drafting the business commencement agreement