Re: Sec 68

Can addition U/S 68 cash credit in form of unsecured loan made in assessment settled under Vivad to vishwas scheme, can appellant be able to credit ?to capital account of unpaid loan still appearing in balance sheet of appellant

The CBDT Circular No 21/20 dt 4-12-2020 Q No 81 reads as under ;  In respect of some loan, addition was made U/S 68 of the Act. Appeal is
pending beforeCIT(A) and the assessee is eligible for opting Vivad se
Vlshwas. After making the payment of tax under Vivad se Vishwas, can the
assessee make entries in his books by crediting the said loan in his capital
account?

No, Vivad seVishwasis not an amnesty scheme. It only provides an option to settle appeals on contentious issues that are neither accepted by the Department nor the assessee. We have clarified earlier  stating that  the accounting entries will be independent and would not be saved by the scheme. It is fair to assume that the accounting entries by itself would not attract the income tax under the regular provisions of the Income Tax Act. However the liability to MAT u/s 115JB for that year would require to be contested if such tax is levied. The issue under the Companies Act and SEBI laws and the listing agreements and of the corporate governance and also of the CSR spends would require to be deeply examined. There are no immunity as  per the scheme.

 

 

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