Shortage of Cash

This query is : Resolved

CA.Satinder Pal Singh (Querist)
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18 June 2008 Cash is Short in the books and expenditure is there up to 4 lacs which was done from the personal account of director what r the sources keeping in view income tax act. unsecured loan etc. i can bring cash in the books

CA BISHAN AGARWAL

CA BISHAN AGARWAL (Expert)
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18 June 2008 EXPENSES DR
TO LOAN FROM DIRECTOR

THERE IS NO OTHER SOLUTION

o.velavan

o.velavan (Expert)
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18 June 2008 that cash may bring as share application money from director if the share capital is authorised to that extent.If you do like this you may avoid penaly but you must allot the share to that extent.

In one HC judgement,it was held that,share application money shall be treated as deposit hence if you not allot the share ,cash credit would attract penalty u/s 269SS

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CA.Satinder Pal Singh

CA.Satinder Pal Singh (Querist)
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19 June 2008 Authorized capital is already exaushted. Now can application money be taken which togather with paid up capital exceeds authorized capital. if it is shown as loan from director then how we can escape from penality of 269. other thing we are capitalizating all expenditure because the company is in the gestation period. we are not claming these exp. as revenue expenditure. then whether sec. 269 applies. what can i do so that i can capitalize the whole exp. and no penality is attracted. plz suggest

CA.Satinder Pal Singh

CA.Satinder Pal Singh (Querist)
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19 June 2008 plz suggest

Satish K Sekhar.ACCA

Satish K Sekhar.ACCA (Expert)
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21 June 2008 The suggestion by CA Bishan is suitable for your situation, where pre-operative expenses are being incurred by cash.(The situation is somewhat in your favour as there is no standardised expenses being incurred , because the commercial activites are not commenced) This unsecured loans can later be converted to SAM and then share capital.