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Bank a/c for convenience

Tax queries 539 views 1 replies

CA. Roopali Kadam

Jobs on assignment basis.

1481 Points Posted on 03 April 2012

Employer has asked

his functional/operational manager

to open Bank account in his (managers) name

to pay/reimburse him for various project expenses.

Though the Account opened is in managers name, he had used it only for office/project purpose. He has not used/transacted it for any personal transaction.

So, my Queries are:

1) Does this Manager has to consider this Account in filing Income Tax returns for Saving Bank Interest, etc?

2) Will he be answerable to ITdepartment if Employer is not considering this account in their books (not even for Audit)?

3) This account is helping him in smooth receipts(direct internet transfer in his account) from employers and better payment tracking to his vendors (all in cash, per day it may go beyond 20000 per day per head)

Please give suggestions.

Replies (1)

Member

Management

325 Points Posted on 05 April 2012

If it is a purely business account for his employer through which only official business is transacted, then there is no need for the manager to disclose this account. After all, only the account operates in his name whereas all the transactions are for the company. May be he can open the account with the title "AAA, Manager" so as to clear the air. If the employer does not show the same in his return, then there is a problem as th employer can always say that the Manager had done it on his own and the employer was not aware of the account. It all boils down to the facts. It may also be hard for the Manager to convince the IT Department that all the transactions were only for the purpose of his company and not himself. Of course if even a single personal transaction is found in the account, then he will be in trouble.