Netting of receivables and payables

This query is : Resolved

Ajay l (Querist)
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23 March 2019 Hello,

Their is one company (M/s. ABC Pvt Ltd) having directors Mr. A & Mr. B. Mr. B is also having its sole proprietorship named B Exports.

M/s.ABC Pvt Ltd is having receivable from Mr.X (Customer) and B Exports is having payables to Mr.X. Can both the receivables and payables be adjusted.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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23 March 2019 + Net off is possible if both parties agree supported by evidences/ resolution in
writing.

+ But for Company it is a related party transaction and disclosure required per
AS-18. and

+ For Director, payment can be considered as 'deemed dividend' u/s 2 (22)(e) of
the IT Act,1961.