03 April 2012
Can a Director of Pvt. Ltd. company make payment to the vendors or suppliers of companies (especially amount above Rs.20000) through his personal credit card? Illustration: ABC company bought a Laptop worth Rs.35000/-. The director of company made this payment through his personal credit card of XYZ Bank. Finally either company has paid the amount either to the Director or to the XYZ Bank on the due payment date. How this can be taken by income tax department?
04 April 2012
There is no problem in this transaction. The director has incurred an expenditure on behalf of the company and later the same has been reimbursed by the company.
However, you may have to prove that the laptop for company purpose and not for the personal use of the director.
04 April 2012
There is no bar in owning any asset by the company it is not material who pays for it. This can be regularised by way of journal entries but the vital thing is this that the company should own it, it is included in the company's fixed assets register and it is for the business purpose of the company
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