Neha Bhattar (none) (170 Points)
05 September 2013Plzzz reply soon.....
if a loan has been given by a sole proprietorship concern to another proprietorship concern which is related, do we have to disclose this in form 3cd for tax audit???
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 05 September 2013
Dear Neha,
The same would be required to be disclosed in Form 3CD provided the amount of loan exceeds the limit prescribed u/s 269SS, 269T.... i.e. 20000 or above.. if it is below that limit, though they are related parties, for e.g. 10000 loan, then there is no need for such disclosure in tax audit report.
Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com
Neha Bhattar
(none)
(170 Points)
Replied 05 September 2013
clause 24 of form 3cd deals with the loan taken or loan repaid.
if a firm A gives loan to firm B, does A(who has given loan) needs to disclose this in his tax audit.
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 05 September 2013
Dear Neha,
if it exceeds the prescribed amount under sec. 269SS, then firm B needs to disclose it in its tax audit report, as the wordings of clause 24(a) says:- taken or accepted... and firm B took that loan...
Neha Bhattar
(none)
(170 Points)
Replied 05 September 2013
Dear, I am not asking for firm B....
if anything needs to be done in Firm A's report... i need to know that.
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 05 September 2013
For Firm A, no disclosure in audit report required....
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 05 September 2013
CA Bada Sanjay Kumar Reddy
(CA)
(69 Points)
Replied 07 September 2013
CA Bada Sanjay Kumar Reddy
(CA)
(69 Points)
Replied 07 September 2013
Dear Neha and Arora,
The word used in section 269 SS and T is whether the loan taken or accepted. For your information it does not cover repayment. From the above conversation I feel from the view point of Firm, It has neither taken nor accepted but it is given. So it is not required for the year in which the loan is given.
But subsequent to that there may be repayment of the same loan by Firm B then it may become an acceptance for Firm A. Then you may ask whether such transaction in the year of repayment attracts 269 SS and T, whether such disclosure is required in the books of Firm A. Just think and get back to me. I will suggest even on that issue.
CA Bada Sanjay Kumar Reddy
(CA)
(69 Points)
Replied 07 September 2013
CA Bada Sanjay Kumar Reddy
(CA)
(69 Points)
Replied 07 September 2013
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 07 September 2013
sirji, that clause 18 is referring to sec. 40A(2) only....
CA Bada Sanjay Kumar Reddy
(CA)
(69 Points)
Replied 07 September 2013
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 07 September 2013
Dear Sir,
sorry for asking again and again... but relying upon the intention of the IT Dept. whether any practicing CA would be happy if he needs to enlarge his/her scope to that extent.... sirji, in my view Rs. 20000 is not very high amount, and if in one's audit, CA do all such verification e.g. payment to relatives and that payment is in terms of loan reimbursement also, not loan redemption only....
and also, why did you deny at your 2nd comment on this post while replying to Ms. Neha's query that "sec. 269SS covers only loan taken or accepted, it doesn't cover the cases when loan is given....etc...." those were your wordings only... if relying upon that clause 18 covers all payments, then that payment of loan MUST ALSO BE covered... not in clause 24 but in 18... kindly say, if i am wrong.... and then all cases of payment e.g. loan given, making petty cash payment, for other purposes etc.... will be covered... and the concerned CA will get burdened with too much work... for which NO TOO-MUCH BENEFIT is foreseen...
Requesting you to kindly substantiate (any point, any link etc... you could give). Thanks in advance.. and should i share Guidance note on tax audit? I think you must have that copy, thus, didn't share it till now...
Thanks in advance..
CA Lovely Arora
ca.lovelyarora @ gmail.com
CAclubindia
