Allowability of Compensation Paid

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..... Allowability of Compensation Paid
Query (Issue) Started By: - Ethirajan Parthasarathy Dated:- 15-6-2020 Last Reply Date:- 20-6-2020 Income Tax
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Income Tax
"A" supplies Raw mate .....

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..... rial to "B". It so happens that ouput of "B" by using "A"s supply turns out to bad / nonsaleable. To maintain good relationship and keeping commercial expediency in view, "A" agrees to pay compensatio .....

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..... n to "B" calculated at sale value of defective output. It is proven that "B" output has become non-saleable because of raw material supplied by "A". Questions :- a) Whether "A" can claim deduction u .....

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..... /s 37 of IT Act of Compensation to B b) Whether "A" is liable to deduct any TDS Reply By DR.MARIAPPAN GOVINDARAJAN: The Reply: In my view claim of deduction under section 37 of Income Tax Act is ap .....

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..... plicable. I am also doubt whether TDS is applciable in this case.
Discussion Forum - Knowledge Sharing .....

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