company Law Query

Dear Anshul,

If the expenses in Delhi are incurred for the Company then it can be adjusted against the loan...

As far as Compliances are required, since it is a Private company nothing much just the Borad has to approve this adjustment in the Board Meeting..Further the information should be disclosed as a foot note to Balance Sheet in terms of AS-18, RELATED PARTY DISCLOSURES..

AUDITOR SHALL MENTION THE FACT IN THE TAX AUDIT REPORT NOW THIS WAS MY QUERY WHICH I HAD POSTED ON TAX FORUM WHETHER SEC 269T GETS ATTRACTED IN THIS CASE(i:e Repayment of Loan otherwise than by A/c payee Cheque/Draft) - I M NOT SURE ON THIS.........

But if the Director is also the shareholder in the company(with 10% or more shares) then Sec 2(22)(e) comes in picture & It will be treated as Dividend to the extent of the reserves of the company.