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Treatment of cc against property in balance sheet?

Tax (Student) (165 Points)

17 March 2017

An assessee took out a CC limit from a Bank against mortgage of property at the beginning of the year

How to show it in Balance Sheet at the end of the year?

How much to show in liab side and how much to show in assets side?

Please help..

Thanks in advance..

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10 Replies

Piyush Tanwar (Assistant Manager - Accounts) (1432 Points)
Replied 17 March 2017

value of property acquired on the asset side under mortgage property against CC (under Fixed Assets)

Value of CC to be shown in liabilities side under unsecured loan.

Tax (Student) (165 Points)
Replied 17 March 2017

Property mortgaged with bank for CC to be shown as an asset?

Just confirming

CA PuRvI M!$rA (-) (2260 Points)
Replied 17 March 2017

Property in asset side and CC loan as Secured loan in liability side.

Tax (Student) (165 Points)
Replied 18 March 2017

Originally posted by : CA PuRvI M!$rA
	Property in asset side and CC loan as Secured loan in liability side.

Ma'am..

It's a personal residential property of the assessee that has been mortgaged with the bank for availing CC..

Can we show it under assets side in a business balance sheet or should we prepare a merged personal & business balance sheet for the same?

Ajit Hegde (CA - Final) (1367 Points)
Replied 18 March 2017

If business is in your name i e, proprietorship, there will be a single balance sheet and single return to be filed for the PAN.

If the income is below 50 lakhs and the property is not used for business purpose purpose, you need not show the asset in the balance sheet. Showing unsecured loan will suffice.

Suraj Sharma (MD) (23 Points)
Replied 18 March 2017

CC shown under Current liabilities because CC limit is for 1 year and subsequently renewed annually and personal property mortgage is disclose in Notes to Accounts and
Another thing about property in assets side is a matter of professional judgment and custom followed by proprietor in earlier year Balance Sheet

Tax (Student) (165 Points)
Replied 18 March 2017

The property mortgaged is a residential property..

Assessee operates his business from home..

So.. Should the property being shown as Assets in Balance sheet?

Should the property be shown at ACQUISTION & CONSTRUCTION COST (Land & Building)?

RAHIL (ACCOUNTANCY) (247 Points)
Replied 19 March 2017

Yes, Residential property needs to be shown on asset side of the balance sheet.

Yog Raj (Accountant) (155 Points)
Replied 29 March 2017

Originally posted by : Ajit Hegde
	If business is in your name i e, proprietorship, there will be a single balance sheet and single return to be filed for the PAN. If the income is below 50 lakhs and the property is not used for business purpose purpose, you need not show the asset in the balance sheet. Showing unsecured loan will suffice.

Is there any ruling or act which exempts proprietor if his income is less than 50 lakhs from showing property in balnace sheet, which is being used for personal purpose?