Personal expenses of a director

This query is : Resolved

P dandekar (Querist)
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24 September 2012 Sir,

Can we add back personal expenses though not incurred.
This is done by our CA , when asked for the explanation , it is told just for adj for our side which i have not understood.

As i understand the personal exp if incurred & taken to companys exp wrongly then it is added back to Income from business & hence the business income increases.

How will AO be satisfied to this explanation ? Will they ignore simply we paid more tax.?

Please explain.

Regards
Purna

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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24 September 2012 Quantity of tax not important and doesn't consider for the assessment or for scrutiny.
Scrutiny aim is identifying of diverted income or actually non-incurred expenditure or non-allowable expenditure according to IT Act etc..

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