Payment onbehalf of other company

This query is : Resolved

YOGESH GUPTA (Querist)
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12 November 2008 Certain bills have been paid by "A" company but the expense agaisnt same has been booked in "B" company after payment.

Company "A" after making payment to vendor debit the account of "B".

In such case when and in whose hand the TDS liabiltiy would arise

REgards

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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12 November 2008 TDS would always arise with respect to person responsible for payment. Check up who is that in this case.

Zeeshan

Zeeshan (Expert)
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12 November 2008 AS PER MY OPINION:
HERE B IS BOOKING THE EXPENSE AND A IS JUST LIKE AN INTERMEDIATOR FOR B IE AGENT.
AND ALWAYS PRINCIPAL IS LIABLE FOR ANY ACT OF AGENT. HERE A IS LIABLE FOR TDS DEDUCTION, AS HE IS MAKING THE PAYMENT ON BEHALF OF B, BUT IF A DOESNOT DEDUCTED THE TDS THEN CONSEQUENSES WILL BE:
THE EXP. WILL BE DISALLOWED IN THE HANDS OF B.
AND FOR ALLOWANCE OF THE SAME B HAS TO DEDUCT THE TDS AND DEPOSIT THE SAME TO THE CREDIT OF GOVT.