Deemed dividend - presentation in accounts & taxation

This query is : Resolved

jayaram (Querist)
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08 February 2011 Please guide me on the following issue

Background:

1. Status of Company: Pvt ltd

2. No. of Directors : 2 ( husband -10% ; wife-90%)

Issue:

1. Tranfers made from company bank account to personal account to the tune
of Rs. 10,00,000 from april to December

2. some payments for reimbursemnt of expenditure incured like telephone bills
travel for business etc and some for salaries of proprietory firm which
is in the name of the wife

3. At the end December some 5,00,000 remains unadjusted as amts given from
his personal account to firms accounts cannot be accounted in pvt ltd
company account as expenditure

Questions

1. How to account the balance as it is a case of deemed dividend to the
extend unadjusted - Debit what to close directors loan account

2. Income tax compliance as far as company is concerned - rate and penalties
as amounts were withdrawn from april to dec

3. Presentation in year end financials the deemed dividend amount -
where and under what description

Thx in advance to all experts. If any furhter info is needed pl let me know

Thx
jayaramprasad

Guest

Guest (Expert)

08 February 2011 Don't think to make adjustment at the year end. Make sure that there should be no debit balance on the director through out the year.

jayaram

jayaram (Querist)
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10 February 2011 Thx sir

Assuming that directors in no mood to listen to sections how I should proceed ?

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Guest

Guest (Expert)

14 February 2011 Let them face consequences