Inter company reconciliation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2012 Dear

I have one doubt in Inter company reconciliation for eg.Company A & B, In this case bill for rental received from Vendor, in name of Company A but payment for the bill is made in the name from company B & Expenses to be debited in company B.

Kindly reply me how to make entry in both company & reconcile it.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 September 2012 In the books of A:

Expense A/c Dr
To Vendor

Vendor A/c Dr
To B
(Being payment made by Co B)

In the books of B:

Co. A A/c Dr
To Bank
(Being payment made on behalf of Co A)

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Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2012 Thank you

But Rental exp also to be debited in Company B.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 September 2012 If the expense is to be booked in the name of company B, then you have 2 options:

1. Ask the vendor to change the invoice and raise the same in the name of Co. B.

2. Ask Co A to raise a rental invoice in the name of Co B.
However, under this option Co A will be liable for service tax.

An expense will only be allowed as deduction if the supporting document is in the name of the assessee.

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Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2012 In the same case they deduct TDS for Rental in Company B. Is it possible that invoice raised in company A but tds for those expenses is deducted in company B. And Pay TDS by company B Pan no.

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