Additions in unsecured loans

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 September 2011 Dear Experts,

A private limited opened its bank account in jan 2011, before this they have no bank account. The directors of the company made payments to creditors for Capital goods from their personal and individual firms and shown the loans in private limited company.The presentation of loans is as under :

a) Shri _____ (Name of Director)
b) M/s _______ (name of his proprietorship firm)

Till 31st march 2011, the company achieved a turnover of Rs.80 lacs and comes under Tax Audit. My Query is :

a) The presentation of loans are ok or not or comes under individual name or proprietorship firm name)
b) All loans are transferred through journal entry, In 3CD under section 269SS, how these entries will reflect.
c) Please tell me also as per companies act.

Thanks

CA. Nitin Agrawal

CA. Nitin Agrawal (Expert)
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17 September 2011 Sec. 269 SS & T will not attract in this case as there is no acceptance of loan exceeding Rs 20,000 otherwise by account payee cheque.

In this case payment is made directly by the director from there personal account. So in my opinion the reporting would be as under:

1. Show under Unsecured loans from Director

2. If that amount is subsequent repaid,
then the same is cover U/s 269 T and
require reporting accordingly.

3. Further related party disclosure
require to be report as per the Co. Act.

wish to invite opinion of other experts regarding the matter.

Cheers now

Querist : Anonymous

Querist : Anonymous (Querist)

18 September 2011 Sir, you are right that the payment is made directly by directors to third party, but when we account for these entries in books through journal entry, the loans of director will stand (it means company is accepting these loans entries) and moreover the amounts also exceeds Rs.20000/-. As per reporting 0f 269SS, these loans are other than account payee cheques. whether it will be reflected as amounts accepted other than account payee cheques etc.

Thanks

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CA. Nitin Agrawal

CA. Nitin Agrawal (Expert)
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28 September 2011 In your previous query you nowhere mentioned that payment was exceeding Rs 20000. If pymt excced Rs 20000 then 269SS & T boh will attract in this case.

269T for pymt exceeding Rs 20000 in hands of director &

269 SS in company to accpt. loan/deposit exceed Rs 20000.