COMPENSATION & RENT AGREEMENT ( LEASE AGREEMENT )

Save Share

This query is : Resolved

Quick Summary

A company leased plant and machinery for three years, receiving payments from the renter. The renter records this as rent, but the company booked it as 'compensation'. The core question is whether the tax department allows this classification, as rent and compensation are distinct terms with different implications for tax purposes.

TARIQUE RIZVI

TARIQUE RIZVI (Querist)
Follow

10 October 2020 We have given our plant and machinery on lease for a period of three years as per lease agreement. The amount paid by renter to our company is being shown as rent paid in the books of accounts of the renter but in our books of accounts is being shown as COMPENSATION. Whether is allowable by the income tax department to shown rent received as COMPENSATION.