Treatment of Bribe

Page no : 2

hitesh (Telecom Industry) (169 Points)
Replied 12 July 2011

Its an illegal expense and hence disallowable....

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CA. MOHAMMAD.QUSROO (CA FINAL) (81 Points)
Replied 12 July 2011

hey, Dont take any tension. It goes directly to general expenses as client has no other account to show this.

hitesh (Telecom Industry) (169 Points)
Replied 12 July 2011

u may debit to general overheads, but subject to scrutiny.. the ame shall be disallowed..

Abhimanyu Bind (CA Final Student & Audit Assitant) (2051 Points)
Replied 12 July 2011

Yes, I have seen the same treatment, amount of bribe has been debited in other expenses account or say sundries expenses account in accounts book.

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 12 July 2011

First of all if you are accounting for bribe, then you shuold also account for the "unaccounted transactions" for which you are paying bribe. You are only concerned about the accounting treatment of bribe. What about the unaccounted income?

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shyam (Asst) (36 Points)
Replied 12 July 2011

Treat it as show under the head "dogfood expense",in which case most of the assessee's would has this expenditure

Anila (Article Assistant) (177 Points)
Replied 12 July 2011

Hello boss dr to individuals capital account and show as drawings!

its as simple as that ;)

CA JAGJIT (Cleared CA in first Attempt) (142 Points)
Replied 12 July 2011

Bribe is like Donation without any tax treatment

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 12 July 2011

Originally posted by : Jagjit Singh
	Bribe is like Donation without any tax treatment

obtain 80G certificate

Anshul Shukla (Article assistant) (63 Points)
Replied 12 July 2011

debit misc exps and it will never disallow by any income tax officer dont worry ;)

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CA Ashwani Agarwal (Practice) (3049 Points)
Replied 12 July 2011

And if any one disallowes it, then pay some bribe to him also and debit that also into misc expense.......

CA Ashwani Agarwal (Practice) (3049 Points)
Replied 12 July 2011

Explaination to section 37(1) of the income tax act says that

For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure.

So it will be surely disallowed in the Computation of income.

ANANT (Service) (156 Points)
Replied 13 July 2011

If this amount is not much high, then show as General Expense....

yatheendra (Article) (89 Points)
Replied 14 July 2011

CA Ashwani Agarwal Practice $(document).ready(function() { $(".i framefancy").fancybox({ //'onClosed' : closedel(), 'hideOnOverlayClick' : false, 'showCloseButton' :true, //'modal':true //'height' : '100%', //'widtth' : '100%', //'modal':true, 'type' : 'i frame' }); }); [ Scorecard : 161]	Posted a day ago
	Explaination to section 37(1) of the income tax act says that For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to

As an auditor we sholud disallow that type of expenditure..

In practical cases some they are showing them as general expenses, incidental expenses etc.,

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CA Ashwani Agarwal (Practice) (3049 Points)
Replied 14 July 2011

Ok, so 1 more simple answer can be that bribe is given to hide your black money or to earn black money........... So it is obviously given from that black money only..

AND WE DONT DO ANY ENTRY OF ANY BLACK MONEY............!!!!!!!!!!!!!!!!!!!