Credit card ( director) used and paid by company

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Shruti Mishra (Querist)
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24 February 2015 In the case of my client the company incurs expenses by using the credit card belonging to the director. The expenses have been claimed rightly in the books of the company & the payment is also made by them (by Company).
During the scrutiny assessment of the director , the A.O is of the opinion that it should be treated as perquisite of the director . Kindly suggest the provisions and the case laws which support my stand.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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24 February 2015 It cannot be treated as Perks since the credit card in the name of director.

A.O might have stand that all the transaction in the credit card is director personal nature and reimbursed by the company.

To avoid that stand of A.O. you can take the certification from the employer with detailed transactions in credit card as " transactions are related to business of the company and not personal or reimburse to director" the certificate can be signed by the authorised official by company and produce to A.O.

Rupesh Jain

Rupesh Jain (Expert)
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25 February 2015 if nature of exp. is personal then its cosnider as perks. but if exp.for company exp. or customer entertainment then its will be company business promotion exp.not perks.

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