Exps allowable for a public ltd co

Tax queries 570 views 3 replies

hi.....

i have seen some companies booking various exps as business exps which according to me should not be allowed like personal electricty & telephone bills,fooding (includes hard drinks ),rental exps of parents ,new articles ,items not relating to business (like clothes ,bags ,sandals etc).society exps &R/M of home .Even insurance & loan being paid from co's funds,medical can be understood but the rest i cant agree of allowing such exps,in case of fooding can exps be allowed on most occasions or those which relate to promoting business   .pls give ur views in this regard.............

 

Replies (3)

These expenses are shown with a way to avoid tax on income.  However if the AO takes the case of such co for scrutiny, then it is upto the co & it's auditors to proove the genuiness of the expenses claimed.

how can an  auditor support the genuineness of such exps...in what way ,could you share it....

The Directors Salary, Allowances, Expenses etc are given as per the companies norms, if any allownaces or  expenses are paid on behalf of director apart from as mentioned in norms are Disallowed as per IT Act


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