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Related Party Payments

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Querist : Anonymous

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Querist : Anonymous (Querist)
16 September 2010 I came across a case where the assessee has shown rent expense payable to his mother. this is a related party transaction. However only the relevant journal entries have been passed and no payment has actually been made. Is this transaction reportable u/s 40A(2)(b)?
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Aditya Maheshwari

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Aditya Maheshwari (Expert)
16 September 2010 Section 40A(2)(b) is applicable in case of expenses debited to the P & L A/c. So in the above case expenses have been debited and hence reportable.
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CA. BIJENDER KR. BANSAL

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CA. BIJENDER KR. BANSAL (Expert)
16 September 2010 Yes, assessee debited the Profit & loss a/c it means he are claiming expense, hence it is to be reported under section 40A(2)(b)
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Querist : Anonymous

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Querist : Anonymous (Querist)
17 September 2010 Thanks Mr. Aditya and Mr. Bijender

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