Allowability of Compensation Paid

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....llowability of Compensation Paid<br> Query (Issue) Started By: - Ethirajan Parthasarathy Dated:- 15-6-2020 Last Reply Date:- 20-6-2020 Income Tax<br>Got 1 Reply<br>Income Tax<br>"A" supplies Raw mater....

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....ial 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 compensation....

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.... 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 app....

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....licable. I am also doubt whether TDS is applciable in this case.<br> Discussion Forum - Knowledge Sharing ....