If my co. has extended any loans to a co. in which shareholder has substantial interest of Rs. 3cr. On date of loan given my co. had accumulated losses of Rs. 50L. Now i wish to w/off the loan advanced of rs. 3cr
What are the income tax implications??
In my opinion if your company had accumulated losses on date of loan 2(22)(e) was never attraced, since loan is deemed div only to extent of acc profit.
and now if you want to write off such loan as irrecoverable, your losses will only increase further in books, and i don't think there would be any tax implication. But remember such amount written off will NOT be allowed as bad debt while computing PGBP in income tax Act.
correct if wrong.
CAclubindia
