Loan credtiors amount treated as income

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Velu (Querist)
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26 November 2008 Dear Friends,

One of our client had received some cash loans which could not be proved up to the satisfaction of the Assessing Officer. The same was added back with returned income and the assessee paid the demand raised. Now the question is what to do with the outstanding amount in Loan creditors account. Can the assessee transfer the amount added with the income to his Capital Account. There should not be further tax liability. Your views please.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 November 2008 The assessee cannot transfer the said amount to capital account.

Velu

Velu (Querist)
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26 November 2008 The amount cannot be transfered to Capital Account means assessee cannot close this until he earns sufficient income to repay this loan. Will there not be a double tax ? Once he has already paid as per Assessing Officer's order and again when he earns sufficient income.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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26 November 2008 Once you received sufficient evidence for the transaction you can eligible for refund.it is your duty to provide all the sufficient document supporing the transaction.Else have to suffer the Double taxations.

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