Advance paid against the project
This query is : Resolved
29 May 2010
I am doing audit of a pvt company,Company has been paying to its group company as advance against the project, and there is no as such any agreement regarding this. This is only a inter company fund mnagement
is there any dislouser requirement?
is there any dislouser requirement?
29 May 2010
Payer: Compnay A
Payee: Company B
The amount paid by A to B cannot be treated as an advance, since the project is of B and not A, it can be treated as a Secured/Unsecured Loan based on the circumstance of the case;
Even though both the companies are of the same group one can not say that there should not be any any agreement, each company has its seperate entity and treat all the transactions in similar parlance so there should be an agreement;
Disclosure will come in Related Party AS-18 of the transactions made during the period.
Feel free to make further discussion
Thank You
Payee: Company B
The amount paid by A to B cannot be treated as an advance, since the project is of B and not A, it can be treated as a Secured/Unsecured Loan based on the circumstance of the case;
Even though both the companies are of the same group one can not say that there should not be any any agreement, each company has its seperate entity and treat all the transactions in similar parlance so there should be an agreement;
Disclosure will come in Related Party AS-18 of the transactions made during the period.
Feel free to make further discussion
Thank You
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29 May 2010
In this case, ITO can treat it deemed dividend u/s 2(22)(e).
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