Security deposit given to director for office space

This query is : Resolved

Mohan Saxena (Querist)
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18 October 2014 Dear Expert,

We have given a security deposit of Rs.2.00 Lacs to a director of the company for office premises owned by him and given to company on lease in the year 2010.

He has sold the premises in the year 2012 to someone but has not paid back the security deposit to the Company.

Since, the amount of Rs.2.00 is still lying as debit in the name of security deposit-director's name in the books of accounts as on date is there any legal complications due to this.

Please advise.

Thanking you in anticipation.

Mohan Saxena

Soumitra Basu

Soumitra Basu (Expert)
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20 October 2014 There is no such legal complication. But this amount may be treated as deemed dividend by the income tax authorities subject to other conditions.