269 SS and 269 T, how to show the following?

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Ashish Toms (Querist)
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03 September 2010 If a company owes Rs. 100000 as salary payable to a director and during the year the amount has been adjusted as loan from directors. Then how should the amount of additional Rs. 100000 be shown under 269 SS? It is acceptance of Loan but not in cash or as cheque. So what should be shown?

Arun

Arun (Expert)
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03 September 2010 Since the company could not able to repay the salary and it wants to convert as loan then it can pass an entry

Salary Payable A/c Dr
To Loan from Director A/c

In such case Sec 269 SS will not applicable. Since there is no cash transaction.

I could not able to understand the 2 question

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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03 September 2010 The book adjustment, of Rs. 1,00,000/- as loan in company's hands ,is not a loan and hence provisions of section 269SS will not apply to the said company.
Citation :- CIT Vs Indore Plastics P ltd (2003) 262 ITR 163 (MP).

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Ashish Toms

Ashish Toms (Querist)
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04 September 2010 Thanks to both the experts for the valuable response. So am I to infer that since the amount is not treated as loan,so the amount of Rs. 100000 has to be omitted from the Statement of 269 SS and T?