Inter company reconciliation

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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)

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)

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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