A company has constructed a residential building by taking loans. The building is given as rent free accommodation to directors and their family members. The company claims interest paid on the loans as expenditure and also depreciation on the building citing that it is a business expense. It hasn't debited the perquisites nor made tds on perquisites. The directors didn't show perquisites in their return. No mention of rent free accommodation was there is Articles of Association. No board resolution was passed for giving such benefit to directors. Can the company claim such interest and depreciation as expense in P&L? Should the residential building be treated as business or personal asset of the company?
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Business expense
Replies (2)
Individual person's assets only treated as personal...
Above said asset (Land & Building) in company's own property. Then Yes, You can claim Depreciation also claim the loan's Interest components as your expenditure...
Above said asset (Land & Building) in company's own property. Then Yes, You can claim Depreciation also claim the loan's Interest components as your expenditure...
Please let me know the provision or section under which the above reply is based on ?
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