Pravin (Accounts Manager) (29 Points)
03 December 2013Hi one of my employee has used his personal saving bank account for compnay expenses in past we as a company use to credit in his bank account and he spends for compnay expnese
now income tax has issued notice to that employee from where you have received so much mony and why not disclosed in income tax return of the employee
we have track record of payments mande to his saving account from compnay bank account
how to rply to that notice can any one suggest some solution
Mihir
(Wealth Manager)
(5293 Points)
Replied 03 December 2013
Check which years details do they want for the purpose income tax assessment. Prepare a detail statement of payment made to the employee, expenses incurred by him, and the final reconciliation. Although the reply has to be given by the employee, but the company will have to attest the letter certifying that the facts given in the reply are true and correct.
If such a practice is going to continue, open a separate account for the employee in which he may operate it only for company's work. Depositing such money in his personal saving account is not a good idea.
CA Nitin K. Varshney
(FCA DISA CCA Peer Reviewer (ICAI))
(616 Points)
Replied 03 December 2013
agreed with mihir, first of all get some informations like for which year notice was issued, what informations and documents AO requires, etc. Then reply in the manner AO requires. show him the reconciliation with company's accounts duly attested by the company.
further as mihir adviced you to open a separate account for such transactions to keep away yourself such problems.
CAclubindia
