Our Company for Technical education purpose RS. 46800.00 & 26700.00 paid to Director son through our Company Cheque Book . Now my Question is Can TDS Applicable here & Which LEDGER Head Show against this transaction..............
niloy sanyal (account manager) (777 Points)
25 June 2019Our Company for Technical education purpose RS. 46800.00 & 26700.00 paid to Director son through our Company Cheque Book . Now my Question is Can TDS Applicable here & Which LEDGER Head Show against this transaction..............
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 25 June 2019
1. Any expense incurred other than for the purpose of business or profession will not be an allowable expenditure as per sec 37.
2. In your case, if the company has incurred expenditure for directors son, there must be a nexus between the business and the expenses incurred. If the same cannot be proved then the entire expenditure of Rs. 73,500 will be disallowed u/s 37.
3. The question of TDS will not apply here as it is an expense incurred on behalf of the director's son.
4. Refer case law Indian Galvanics Cyrium Foils Ltd. Vs DCIT (Bombay High Court) where expenses incurred by the company for the director's son for higher education abroad is disallowed as business expenditure.
Please correct me if the above interpretation has an alternative view.
CA Navya Tejas
(Chartered Accountant)
(132 Points)
Replied 25 June 2019
TDS is not applicable to the aforesaid transaction. Also, it is not an allowable expenditure as it is incurred for the purpose of business. Create a ledger on directors son's name or you can show it in the directors ledger name itself.
prasanth g
(5 Points)
Replied 25 June 2019
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