What is the meaning of the word purposes in the term for the following purposes referred to in sub-section (2) of section 115WB?
The word ‘purposes’ in the term ‘for the following purposes’ referred to in sub -section (2) of section 115WB refers to the proximate purpose and not the distant purpose. For example, if expenditure is incurred on travel for discussing an advertisement plan for a product, such expenditure shall be construed to have been incurred for the proximate purpose of traveling and not the ultimate purpose of advertisement and accordingly liable to FBT.22. If a company incurs expenditure on travelling, hotel etc. wholly and exclusively for executing an assignment for its client and the client reimburses the company for such ‘out of pocket’ expenses, whether the company would be liable for FBT in respect of such ‘out of pocket’ expenses? Since the expenditure on travelling, hotel etc is incurred by the company and not by the client, the company is liable to FBT in respect of such expenditure. However, the client will not be liable to FBT in respect of payment for such expenditure.
