Credit card

This query is : Resolved

sejalben dilipkumar shah (Querist)
Follow

16 September 2011 respected sir, here my query is a person has used his credit card for personal purpose i.e encashed from the store (cash) & at the due date make payt. to the bank i.e mearly arrangement of money for personal purpose & entry passed in the books that cash received by encasing credit card & withdraw for personal purpose & make payt. to bank on due date without debiting credit card charges in the books,

NOW MY QUE. IS- WEATHER IT IS LOAN ?

IT IS NECESSARY TO SHOWN IN THE AUDIT REPORT U/S 269SS

WHAT WILL BE LIABLITY OF THE ASSESSEE IN CASE IT IS A CASE OF SCRUTINY & THE ASSESSING OFFICER TELL IT TO ADD IN THE INCOME ONLY DUE TO NOT SHOWN IN THE BOOKS OF ACCOUNT I.E IN AUDIT REPORT & IT IS AMT. OF RS. 5LACS.

WHAT ARE OF PENALTY PROVISION UNDER SUCH CIRCUMTANCES,

PLEASE HELP ME

U S Sharma

U S Sharma (Expert)
Follow

17 September 2011 such amount spent on CC will be drawings to the person for his living,

cash deposited would be taken as additional income and would be added to taxable income with interest and penalty.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
Follow

18 September 2011 First of all you have to debit the personal account of the person who is spending it as you have stated that it is for his personal spending.

The cash deposited should have some source otherwise you have to treat the same as income.

As regards showing in tax audit report, is he covered by Tax Audit report? If yes then yes

Upgrade to CAclubindia Pro. Subscribe Now!