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Loan

unknown (B.Com) (87 Points)

04 July 2017

can a director who has capital asset held as gold in his returns, provide such pure gold to the company as a loan, since as per 269ss and 269t loan only through cheque is allowed. plz help. the comapny is in jewelry trade.

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4 Replies

Saravanan Sampath (16 Points)
Replied 04 July 2017

section 192 of companies act 2013 will be attracted. this cannot be treated as loan. this come under capital gain.conversion capital asset into stock in trade. these can't be answer in one line. pl need further details. purpose of giving gold to company. for working capital purpose or for stock? lot of implication there...

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unknown (B.Com) (87 Points)
Replied 04 July 2017

dear sir, the situation is like this that the director had gold jewelry in his income tax returns as capital assets since 10 years. now he is a member in private limited company and also a director in the same company. the directro melts the jewelry and trnsfers the bullion to the company to carry on business, now the company makes jewelry out of that bullion and sells it furthur. now the company wants to return that gold back to the director. now please let me knw that is it chargable to capital gain in the hands of director during such transfer or it will be treated as a loan.