whether a firm can pay rent of the partners accomodation, and book it as expense or it have to debit tyhe same to partners capital a/c.reply
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 12 May 2011
its drawings to partners,
capital a/c of partners would get debited for such sum paid from firm.
sarvindkumar jaiswar
(Finance & Account Executive)
(43 Points)
Replied 12 May 2011
No it is not deductable
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 12 May 2011
If it is used for the purpose of firms business, then it may be allowable.
Ronak A Mashkaria
(Chartered Accountant)
(27 Points)
Replied 12 May 2011
Hello...Can anyone give me the checklist of Internal Audit of Society which runs Schools, Colleges and Institution....Its very urgent
Ronak Mashkaria
CA Nikhilesh Singla
(CA)
(83 Points)
Replied 13 May 2011
it will b treated like drawings n must b debited to partner's capital a/c..
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 13 May 2011
There is a case law on this where the partner used to carry on business activities through his home. It was proved to the satisfaction of the Department and only a part of rent was disallowed. Balance portion was allowable.
suman
(Auditor )
(388 Points)
Replied 13 May 2011
If provided in deed & partner is living in that accomodation alone ( Without Family) than we can stablish same for bussiness purpose & get this diduction in income tax
PRASHANT SAWAI
(MANAGER FINANCE)
(30 Points)
Replied 14 May 2011
EVEN THOUGH RE-EMBERSMENT OF RENT EXP. HAS MENTIONED IN DEED, IT’S A PARTNERS PERSONAL EXP. SO IT IS DISALLOWABLE EXPS.
Manjul Soni.
(CA Student.)
(1407 Points)
Replied 14 May 2011
it is treated as drawings and it should be deduct By CApital Account...........
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 14 May 2011
if such accomodation is mentioned in partnership agreement, and the accomodation is taken on rent by firm/ company for exclusive use by partner/director, with payment clause, then it would be available for deduction, otherwise all such payments are to be debited from capital account of respective user partner/director.
CAclubindia
