Loans & advances from directors (Corporate Law)

This query is : Resolved

preetesh

( Author )
28 May 2012

A person
gives loan of Rs. 175000/- to a company in which he is director (in cash) then as a n auditor what i have to do ?

Siddhartha Bhardwaj

( Expert )
29 May 2012

In this case, Section 269SS of the Income Tax Act is attarcted which prohibits accepting loans in cash in excess of Rs. 20,000.

preetesh

( Author )
29 May 2012

thanks a lot Mr. Siddhartha

but what can i do as a auditor

Siddhartha Bhardwaj

( Expert )
29 May 2012

You have to mention the details of the same in Point 24 of Form 3CD.

Soumitra Basu

( Expert )
29 May 2012

If you are a tax auditor then you can mention the same in tax audit report. Otherwise in Statutory audit also you can say that the company has violated the provision of income tax tax and can ask the company for making provision for penalty prescribed under section 276D of the income tax act.