Call girls hired by employees - Should company reimburse? Eligible as tax deduction?
An employee is given a credit card by his employer company to use for his legitimate tax related expenses as due to the employment, he was staying away from his family. He also suggested that he might be able to make tax claims for travel, accommodation or related expenses in performing his work in the new city away from his family.
The Company discovered that he had used the card for hiring call girls/escort services. The Company felt that the company card being used for such entertainment brought a bad name to the Company and promptly dismissed him from service. The aggrieved employee approached the Industrial Court pleading unfair treatment.
The judge remarked , I cannot comprehend how anyone would think that escort agency services could possibly be characterised as an expense that was in some way tax related. The applicant conceded that he had not received any advice about whether or not he might possibly be able to make a claim for taxation purposes for these services. This was despite the fact that his brother is a chartered accountant.
It beggars belief that any such claim could be thought by anyone to be tax related. There is no suggestion of any kind that the "companionship" which the applicant purchased had anything to do with any activities of his employer.
However the judge did not find that the employee had violated any contract of employment by incurring personal expenditure through the Company card, but the Court was quick to point out that the employer was entitled to terminate the employee.
The judge further remarked,
no reasonable person acting reasonably could proceed on the basis that expenses incurred for escort services could possibly be the subject of some form of taxation concession or relief in some manner. Even if the applicant had, in some way, some underlying impression about the possibility of any such claim being made, it was, in my view, incumbent upon him to obtain some advice at the least before availing himself of the right to use the respondent's assets in extending credit to him via the corporate card.
If you think there is more masala in this case and as to which are the call girl agencies accepting credit cards in India, let me finish the story that this happened in Australia recently in Sinadinos v EDI Rail Pty Limited [2007] NSWIRComm 294 decided on 5/12/2007