Director indebted to company-is it permisable

Personal expenses paid to directors are considered legal as per the Companies Act, provided that they are authorized by the AOA and a resolution to that effect is being passed at the Board Meeting.  Any personal expenses other than the above would be against the law.  the amount wuold not matter as long as it is authorized by the company. In such case the auditor would have to report.

LET ME KNOW AS PER WHAT SECTION WE CAN DO SO,,

AS I NEED TO GIVE OPINION TO COMPANY I NEED TO KNOW AS PER WHAT SECTON

there's no section as such for the opinion whihc you would give.  It's all about complying the legal formalities, such as passing the Board Resolution, adhering to the Articles etc... becasaue if the tax authorities question about the  this then the company would be able to provide teh requried evidence.

Yes but from reporting point of view as per section 227(1A) the auditor has to make specific inquiries about the six clauses, of whihc one is relating to eprsonal expenses.  Also as per section 227(4A) the auditor hs to report as per CARO if any personal expenses are being debited to P&L.

but here the case is, this expenditure was not debiting to profit and loss account,

but it was accounted as advance payment to director over the years as of now it is accumulated to 82lakhs.

what is the reason for accumulating the expenditure & ot debiting to P&L.  

actually it is accounted as advance made and same was repaid by director later

then in that case it would be considered as deemed dividend u/s 2(22)(e)in the hands of director.

so what are the implications on company,

say dividend distribution tax came into force