recasting balance sheet

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This query is : Resolved

Pankaj Gulati (Querist)

11 May 2009 One of my client has shown LIC loan as LIC maturity and added the same in capital. When the case was selected u/s 143(2) for ay 2007-08, this mistake came into light and offered to submit the recasted balance sheet. All the proof regarding loan taken from LIC and its re-payment are present. The ITO says that he will not accept the recasted balance sheet and add the entire amount of loan in his income. Is he correct in doing so ?

In ay 2007-2008 only loan was taken against policy amount, no repayment in that assessment year was done. Thus the same was mistaken as LIC maturity.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)

11 May 2009 No, ITO was not correct. You can appeal to the Commissioner. Loan amount cannot be treated as income.

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CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)

11 May 2009 Repayment of loan is done through bank.
How did your bank a/c tally while finalizing your balance sheet?
Please further elaborate your case .

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