Dear Team,
It would be great if I can get the clarification on below two queries. We are into leasing of motor vehicles.
1. Is the security deposit taken from customer which is refundable in future at the time of termination of lease agreement is free from any income consideration. In our opinion is is a refundable deposit as per the agreement signed so it is free.
2. Advance rental taken from customer for the lease tenure are considered as liabilities and every month a subsequent portion out of that amount is being transferred to income receivable from he client. The client has not considered it as expense in his books and same is in our books also as its treated as liabilities for lease term. Can somebody validate this process.
CAclubindia
