Messages

Mr Patils remarks, though valid, cannot be applied now after the amendment in the clause which says that if either brought forward loss or unabsorbed depreciation is nil, no deduction will be allowed. This is wef AY 2001-02.

I dont buy the argument that a concessional rate of interest can take you out of gift.If interest free loan is gift in the opinion of AO, the concessional will also be so. One has to fight on the basic premise citing indian contract act which defines consideration. A gift is always without any consideration. The repayment on demand is always the consideration for an interest free loan.How can one establish that it is loan and not gift. First is the accounting treatment and second is the disclosure in balance sheet. I would advise to execute a demand promissory note for this purpose. In any case the additions made by AO on this count are in my opinion not sustainable.