If one has tunrover 7 to 10 crore but does not make any voucher for cash expenditures and makes entry according to profit ratio one wants to maintain. Even one make single entry for total expenditure in particular head. like 250000 repaire and maintenance, 350000 office exp., 450000 staffwelfare etc.
what would be legal impact to account and company for such a type of entries?
22 April 2011
Thats a very bad kind of acounting procedure followed by the assessee. If its turnover runs into crores it should maintian proper books of accounts with necessary supportings.
In taxation, any cash entry exceeding Rs. 20000/- would be disallowed like repair, office exp. etc. So it should improve its accounting practice to avoid the concequences.
Also, no prudent CA would do the audit of firm like this. Even if he does, he should qualify his report and show the true picture of the firm.
10 June 2011
This is the case where no ca will be interested to look into the matter...and all the penal sections of tax & roc will be apply to the company
CAclubindia
