16 October 2008
Hi Friends If propriety firm subject to Tax Audit U/s 44AB Borrowed Rs.1000000/- in cash from a Doctor X [Showed Advance in his books]. The said borrowing would attract sec 269SS. In order to avoid it can I show the borrowings as an additions to capital A/c ? without showing the balance in Balance sheet and at the time of payment whether by cash/cheque can I show as drawings?
16 October 2008
no, u can't do this. but u can show this Rs 10 lac as advance against sale of property & drafting an agreement of sale(if receiver has an capital assets such as immovable property etc. )and on the payment date u can repaid this amount by cancelling the agreements.
CAclubindia
