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Accounting of expenses

fakrudheen (Audit Assistant) (341 Points)

31 October 2015

we are providing construction service, accidently one of our project got stay order from high court, for this case director are frequently travelling to visit advocate & also appear in high court

my question is that travelling expenses can i accounted in legal charges

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5 Replies

Ruchi (CA) (1410 Points)
Replied 31 October 2015

No... travelling expenses here should not be accounted in legal charges but as 'Travelling expenses' only..

NAVEESH DHAR (ADVOCATE- TAXATION ADVISOR) (427 Points)
Replied 31 October 2015

Alternatively you may accounted the head as legal expenses not legal charges

Ashpak Ali (Finance Accounts Manager) (87 Points)
Replied 01 November 2015

Travlling will not be accounted as a legale charges.

Vivek Venkataram (Just cleared CS(441/800) now C.A Final A) (772 Points)
Replied 02 November 2015

Dont complicate things. In the legal expenses head only debit those expenses which are professional charges wherein you will deduct tds and client will pay service tax if applicable. Travelling and other reimbursements put them in travelling expense or reimbursement account respectively and can link them to the legal charges via narration or an entry comment.

KRISHNAPRASAD (CEO) (21 Points)
Replied 09 December 2015

If you want to recover this expenditure from your vendor... then you can account it as travelling exependiture a/c and pass a JV to the vendor account... you cannot book this expenses as legal charges.. if you book this as legal charges it attract TDS and then supporting bill will not match with your accounting policy.

Krishnaprasad.mb