Fixed assets Purchase as part of relocation

This query is : Resolved

anil (Querist)
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05 August 2010 Fact:
If an Employee Purchase any Fixed for Personal Use, and if company agrees to pay as part of Relocation Exp.

Query:
Will company able to treat it as Assets or Expenses it off as a part of Relocation Exp?

CA. Pradeep Nayak

CA. Pradeep Nayak (Expert)
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05 August 2010 If the assets are purchased in the name of the employee & Co. bears the expense:
a) The Co. can charge it off as expense in its books.
b) The entire value of such assets will be added to the income of the employee & taxed as perquisites.

If the assets are purchased in the name of the co. & given to employee for personal use:
a) The assets will be capitalised in the books of the Co. on which it will be entitled to claim depreciation.
b) Based on the nature of the asset, a fixed percentage of the value of asset will be added to the income of the employee every year & taxed as perquisite.