the terms “LOAN”, “INCOME”. “INVESTMENT”, “LIABILITY”,etc; etc; should be carefully understood before computing the REAL INCOME . "Loan” can be treated as legitimate source. There is no doubt on it. . But the point is whether the Loan availed can be treated as “income” for calculating the ASSET value. if one’s salary is 1 crore and bought property 1.5 C and get loan for 50L .Then if he/she returns the INCOME TAX in that case the Income 1Cr will be taken into account. In case if he/she returns WEALTH or PROPERTY TAX in that case your valuation of 1.5 Cr will be taken into account for assessing the value of immovable ASSETS.
Here the value he/she borrowed the amount 50L can be treated as a “LIABILITY” item only. This “LIABILITY” item is not taken for calculating the Income Tax. You know that they [Jayalaitha and Sasi]returned the IT for their income for their assessed amount of income from Grape garden =Rs.46,71,600 plus sasi Enterprises and Jaya Publications and Namathu MGR=Rs 4.25 Cr plus Rental Income and Income assessed by DVAC=Rs. 9,34,26,054 Totally it comes as around Rs.14.25Cr and It is noteworthy that they returned the IT for this amount only not for the Bank LOAN amount= Rs.18,17,46,000/-
Could you find this numbers in the Page 913.? That means the LOAN amount is not added in their Income Tax assessment. Bcoz they know this LOAN amount is a “LIABILITY” item . Conversely , this “LIABILITY” item can be treated either as a INVESTMENT amount or “DEBTS repayable “[as it is long term Bank loan] for their purchase of other immovable assets.
This simple trick is now a days being used all over the world just to convert the UNACCOUNTED BLACK MONEY into WHITE. Say for example if you purchase an assets of value X with ur TAX paid savings and investment[that too via white account] and if the white amount is “Y” which is say with shortage of Rs “.Z” to buy the value “X” In this case if you get this value “Z” via Bank Loan on the basis of transactions of some bogus companies which is just for transferring and converting the whatever the unaccounted black money into WHITE money then in this case the above said amount Rs. “Z” becomes the white money and it is cleanly diverted as LOAN [white money ] to Jaya and Sasi group as white money via bank Loan. But can anyone say this Loan can be treated as Income or revenue.? Only senseless idiotic arguments will say this amount “Z’ is as “INCOME”. This value ‘Z” [despite it was converted into white money] is definitely a LIABILITY item or in other words it is INVESTMENT money or in more clear word it is a DEBTS repayable money for purchasing further assets for jaya and Sasi.
We know after the check period 1991-96 the so called 32 number of companies started by J. and Sasi are now no more and vanished. Bcoz they were well utilised to convert their Black to White game and vanished away.We can show you hundreds of Supreme court directions and verdicts on this matter that the LOAN can not be treated as INCOME for evaluating the ASSET in Dis appropriated conditions.
Now a days the Black money laundering become a vital issue and present Modi Govt. amended this act for preventing the Black and White game. If this case brought before the Honble Supreme court definitely this question arises. We must study further on this topic and there is no mistake on taking Loan from Bank or any one. In case if it is from Nationalised bank it will help them to claim it the money that held by them be clean money for just proving purpose only. But the question is the Judge is not seeking this step for just proving the Loan “genuineness” factor.
The Judge made it and used this “LOAN” item as a “Revenue” head and converted the borrowed amount as “Income” Here only it makes the difference. Loan can not be taken into account for calculating the REVENUE bcoz it is definitely repayable item. But this strange decision which taken by the KHC Judge should have been taken to only ascertain the GENUINENESS for source of fund/money needed to buy the additional assets not definitely for “Income” item.
Also one can say that LOAN will do two things : It increases ASSETS as well as LIABILITY.Yes this point agreeable the Loan will do only above said two things .But the same “LOAN” will not do anything or play any role on REVENUE or INCOME. If any amount [ as per FINANCIAL terminology ] used for increases the task of ASSETS and LIABILITY then it is definitely known as “INVESTMENT” or “CAPITAL fund” for investing /or purchasing any ASSETS or BUSINESS . So now as far as the above explanation it is evident that it is for INVESTMENT/or CAPITAL amount only not for any INCOME or REVENUE .
This concept will also fit for both Individuals as well as Companies /firms. Secondly you mentioned the judge is seeking for total INCOME from all sources not earned Income. Here also you made the same error. So, if it is earned income from any accountable sources say from Income yielding assets or business or any legal means then definitely that will be called as EARNED INCOME . But what we say about “TOTAL” earned income also the legal money which means the income generated from above said sources only not include it from any BANK LOANS or any money got from private parties or Private companies /private banks.
Loans are to be looked as “loans” only not it can be used for computation of one’s Income. similarly LOAN can be deployed as INVESTMENT/CAPITAL in one’s financial statement. Some times the Auditor s will call it as “CASH OUT FLOW”This also apply to this case.
<==Back how this great blunder .???/ formula error analysis click here =>>>
Here the value he/she borrowed the amount 50L can be treated as a “LIABILITY” item only. This “LIABILITY” item is not taken for calculating the Income Tax. You know that they [Jayalaitha and Sasi]returned the IT for their income for their assessed amount of income from Grape garden =Rs.46,71,600 plus sasi Enterprises and Jaya Publications and Namathu MGR=Rs 4.25 Cr plus Rental Income and Income assessed by DVAC=Rs. 9,34,26,054 Totally it comes as around Rs.14.25Cr and It is noteworthy that they returned the IT for this amount only not for the Bank LOAN amount= Rs.18,17,46,000/-
Could you find this numbers in the Page 913.? That means the LOAN amount is not added in their Income Tax assessment. Bcoz they know this LOAN amount is a “LIABILITY” item . Conversely , this “LIABILITY” item can be treated either as a INVESTMENT amount or “DEBTS repayable “[as it is long term Bank loan] for their purchase of other immovable assets.
This simple trick is now a days being used all over the world just to convert the UNACCOUNTED BLACK MONEY into WHITE. Say for example if you purchase an assets of value X with ur TAX paid savings and investment[that too via white account] and if the white amount is “Y” which is say with shortage of Rs “.Z” to buy the value “X” In this case if you get this value “Z” via Bank Loan on the basis of transactions of some bogus companies which is just for transferring and converting the whatever the unaccounted black money into WHITE money then in this case the above said amount Rs. “Z” becomes the white money and it is cleanly diverted as LOAN [white money ] to Jaya and Sasi group as white money via bank Loan. But can anyone say this Loan can be treated as Income or revenue.? Only senseless idiotic arguments will say this amount “Z’ is as “INCOME”. This value ‘Z” [despite it was converted into white money] is definitely a LIABILITY item or in other words it is INVESTMENT money or in more clear word it is a DEBTS repayable money for purchasing further assets for jaya and Sasi.
We know after the check period 1991-96 the so called 32 number of companies started by J. and Sasi are now no more and vanished. Bcoz they were well utilised to convert their Black to White game and vanished away.We can show you hundreds of Supreme court directions and verdicts on this matter that the LOAN can not be treated as INCOME for evaluating the ASSET in Dis appropriated conditions.
Now a days the Black money laundering become a vital issue and present Modi Govt. amended this act for preventing the Black and White game. If this case brought before the Honble Supreme court definitely this question arises. We must study further on this topic and there is no mistake on taking Loan from Bank or any one. In case if it is from Nationalised bank it will help them to claim it the money that held by them be clean money for just proving purpose only. But the question is the Judge is not seeking this step for just proving the Loan “genuineness” factor.
The Judge made it and used this “LOAN” item as a “Revenue” head and converted the borrowed amount as “Income” Here only it makes the difference. Loan can not be taken into account for calculating the REVENUE bcoz it is definitely repayable item. But this strange decision which taken by the KHC Judge should have been taken to only ascertain the GENUINENESS for source of fund/money needed to buy the additional assets not definitely for “Income” item.
Also one can say that LOAN will do two things : It increases ASSETS as well as LIABILITY.Yes this point agreeable the Loan will do only above said two things .But the same “LOAN” will not do anything or play any role on REVENUE or INCOME. If any amount [ as per FINANCIAL terminology ] used for increases the task of ASSETS and LIABILITY then it is definitely known as “INVESTMENT” or “CAPITAL fund” for investing /or purchasing any ASSETS or BUSINESS . So now as far as the above explanation it is evident that it is for INVESTMENT/or CAPITAL amount only not for any INCOME or REVENUE .
This concept will also fit for both Individuals as well as Companies /firms. Secondly you mentioned the judge is seeking for total INCOME from all sources not earned Income. Here also you made the same error. So, if it is earned income from any accountable sources say from Income yielding assets or business or any legal means then definitely that will be called as EARNED INCOME . But what we say about “TOTAL” earned income also the legal money which means the income generated from above said sources only not include it from any BANK LOANS or any money got from private parties or Private companies /private banks.
Loans are to be looked as “loans” only not it can be used for computation of one’s Income. similarly LOAN can be deployed as INVESTMENT/CAPITAL in one’s financial statement. Some times the Auditor s will call it as “CASH OUT FLOW”This also apply to this case.
<==Back how this great blunder .???/ formula error analysis click here =>>>
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