Director personal exp.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 July 2010 Hi
Respected Member

Can any one help me?

I doing private co. tax audit in that case director's personal expenses is reimbures like conveyence and travelling and mobile and electricity exp. etc.

SO what treatment should be done as auditor?

Akhil Agrawal

Akhil Agrawal (Expert)
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15 July 2010 Just check that these expenses are not getting covered u/s 40A(2) of the Act as Directors are the specified persons for the section. Also check the supports of the expenses for their genuinity.

Krishan

Krishan (Expert)
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15 July 2010 Personal Expenses of director will be disallowed and is to be shown in form 3CD...

Also check the appointment, if it contains that the expenses (partly / wholly) is to be bear be the company then it would no more be the personal expense (to that extent) of the director and would be allowed.... otherwise it is to be disallowed..

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Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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15 July 2010 If the expenses of directors are related or for the business then they will be allowed. There can be expenses which looks like personal in nature but can be related to the business. I have read the contraversy on this point and there in many cases if the expenses can be related to business then it will be allowed otherwise it will be disallowed.