Personal expenses of a director
This query is : Resolved
P dandekar
(Querist)
24 September 2012
Sir,
Can we add back personal expenses though not incurred.
This is done by our CA , when asked for the explanation , it is told just for adj for our side which i have not understood.
As i understand the personal exp if incurred & taken to companys exp wrongly then it is added back to Income from business & hence the business income increases.
How will AO be satisfied to this explanation ? Will they ignore simply we paid more tax.?
Please explain.
Regards
Purna
Can we add back personal expenses though not incurred.
This is done by our CA , when asked for the explanation , it is told just for adj for our side which i have not understood.
As i understand the personal exp if incurred & taken to companys exp wrongly then it is added back to Income from business & hence the business income increases.
How will AO be satisfied to this explanation ? Will they ignore simply we paid more tax.?
Please explain.
Regards
Purna
Dintakurthi Tirumala
(Expert)
24 September 2012
Quantity of tax not important and doesn't consider for the assessment or for scrutiny.
Scrutiny aim is identifying of diverted income or actually non-incurred expenditure or non-allowable expenditure according to IT Act etc..
OM SAI SRI SAI JAI JAI SAI
Scrutiny aim is identifying of diverted income or actually non-incurred expenditure or non-allowable expenditure according to IT Act etc..
OM SAI SRI SAI JAI JAI SAI
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