TaxTMI 
TaxTMI 
A Pvt ltd company who has received Share Application Money for Rs. 1Crore in the F.Y. 2013-14 wants to transfer the said application money to Unsecured Loan A/c. Can it do so ?Please give Case Law reference of any High Court or Supreme Court.
SHARE APPLICATION MONEY
03 Jun 2014 
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Share application money reclassification permitted when done on depositor instruction, avoiding prohibited deposit acceptance consequences.
A private limited company may, on the depositor's instruction, transfer received share application money to an unsecured loan account; such a reclassification is a matter of accounting treatment and, where it reflects the applicant's direction rather than a fresh act of deposit-taking, has been held not to contravene the statutory prohibition on acceptance of deposits under relevant tax-administrative precedent. (AI Summary)
A private limited company may, on the depositor's instruction, transfer received share application money to an unsecured loan account; such a reclassification is a matter of accounting treatment and, where it reflects the applicant's direction rather than a fresh act of deposit-taking, has been held not to contravene the statutory prohibition on acceptance of deposits under relevant tax-administrative precedent. (AI Summary)