Urgent

U had adjusted share application money with the loan in 2010-11 A.Y> after that what happens

I didnt understand clearly

What is the issue exactly?

Your adjustment of application money against the loan!!

Can you mention what the assessing officer is quoting and which section he is referring too. It would be easier to relate if you quote a section and assessing officer's view.

Sir,

Actually the share application money received from one of the brother who is also the director of the company against which shares have been issued for lesser amount and the remaining amount to be refunded to one director is adjusted against loan given by the company to another director. So the case here is that loan is adjusted against the share application money to be refunded to other director.

Please make me clear regarding the same whether this type of book entry is allowed or not ? Or we have to face some consequences for the same.

Regards,

Sonam Gulati

In my view.

Such book entries will not have any implication. However, there may arise a question U/s.2(22)e, because loan received by the company from one director has been given to another director. But if the amount is not substantial there is chance it may go unnoticed.

You can wait for other views as well.