what are the points to be taken into consideration (from tax saving perspective) where a company is planning to give its premises - building (constructed by it) on lease to its sister concern/ associate company?
Sridhar Gobburu (Student Article Trainee) (38 Points)
25 January 2010what are the points to be taken into consideration (from tax saving perspective) where a company is planning to give its premises - building (constructed by it) on lease to its sister concern/ associate company?
Amir
(Learner)
(4016 Points)
Replied 25 January 2010
Dear GVS,
Under Income Tax
Lease Rent should be justifiable otherwise it can be dissallowed u/s 40A(2)(b)
Auditor will report the expenditure in Tax Audit Report
Under Service Tax
Service tax is to be paid on Due Basis being associated enterprise
Under AS
AS-18 Related Party Transanctions requires the disclosures in the Balance Sheet
Under Companies Act
Entry in the register maintained u/s 301 to be made.
Interest Director will not vote on the resolution if it is the case of Public company
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