Mobile phone in the name of director would be capitalised in the books of pvt. ltd. company or not. give reference
2 Replies
Amir
(Learner)
(4016 Points)
Replied 17 February 2010
Dear Chetan,
If u r talking from Income tax point then my friend "it has been held under various judgements that beneficial ownership has to be seen & ownership on documents is not necessary)
But if u r saying from accounting point of view then there is only one person who can answer this question & that's U my friend........
Ok I will give few examples then u decide urself (Forget about in whose name Mobile phone is purchased) -
1) Co. has made the payment( or Director has made the payment & then getting it reimbursed) & give the mobile phone to the Director on the condition that when he will leave this job then either he will repurchase it from the Co. or will return it to the company - YES co. will capitalize.
2) Co. has made the payment & handedover the mobile to Director & now it's the Director who is the whole sole owner of the mobile phone in that case for company it is a revenue expenditure..(i:e the it will be treated as a salary expense for the company being part of the compensation of to the Director) - No co. will not capitalize.
3) The Director tries to book his personal expenses in the co - in this case forget about capital, he will not be allowed to book revenue expenses.........
In short there are no hard & fast rule relating to capitalization, facts of the case will determine....
Recent Topics
- NRO Interest - Taxed at source and in Foreign Coun
- Clarity needed on effective date
- Income Tax Refund Deadline Shortened to Five Years
- Rectification Applications for Past GST Demands
- Where can I find a trusted provider to hire a skip
- GST Invoices Series
- FILING OF ITR AY 20-21
- CLAIMING OF U CLAIMED RCM
- Building construction works
- REGARDING GSTR-9 F.Y 2023-24
Related Threads
CAclubindia
