The company I joined recently is enjoying 80 I A benefit since 1998 and is carrying out certain work for a big corporate group.
All the return upto 31.03.2008 are filed in time and the latest return shows carried forward losses of approx. Rs 8 lakhs both in the form of business loss and depreciation loss. A note attached to the Statement of total Income revealed that 80 I A benefit not claimed since there is carried forward loss and no profit.
Now I have started reconciling the balance of our books with that of the other corporate and found that the other company has credited an amount of Rs 15 lakhs over a period of 2/3 years being rate difference and this has not been accounted for by us.
Can anyone advise me as to the correct way to disclose this with the tax authorities?
Can I revise the returns for the year ending 31.03.2006, 31.03.2007 and 31.03.2008 disclosing this amount?
14 July 2024
Given the scenario you've described, here are the considerations regarding the unaccounted amount of Rs. 15 lakhs and its implications for your company's tax returns:
### 1. Unaccounted Amount of Rs. 15 Lakhs:
- **Nature of Amount:** The amount of Rs. 15 lakhs credited to your company over a period of 2-3 years as rate difference needs to be properly accounted for in your books of accounts. - **Tax Implications:** This amount is likely to be considered as income for your company, as it appears to be a receipt related to the business operations.
### 2. Disclosure to Tax Authorities:
- **Revising Previous Returns:** You can revise the tax returns for the years ending 2006, 2007, and 2008 to properly disclose this income. - **Form 3CD Disclosure:** In the tax audit report (Form 3CD), ensure that this income is disclosed appropriately under the relevant sections. - **Claiming 80IA Benefit:** To claim deduction under Section 80IA, your company must show a positive income (profit) from the eligible business activity after adjusting for any carried forward losses.
### 3. Procedure for Revising Returns:
- **Revised Return Filing:** You can file revised returns for the relevant assessment years (AYs) to disclose the additional income of Rs. 15 lakhs. - **Impact on Section 80IA Benefit:** The deduction under Section 80IA is available to eligible businesses engaged in specified activities (such as infrastructure development). For any AY where you revise the return and disclose income, you need to ensure that after adjusting for losses, if any, there is still a profit from the eligible business activities to claim the deduction.
### 4. Documentation and Compliance:
- **Supporting Documentation:** Gather all relevant documentation and supporting evidence related to the Rs. 15 lakhs income, such as agreements, correspondence, bank statements, etc. - **Tax Audit Consideration:** If your company is subject to tax audit under Section 44AB, ensure that the revised returns and the tax audit report (Form 3CD) reflect the correct income and disclosures.
### Conclusion:
- **Revising Returns:** Yes, you can revise the tax returns for the specified years to disclose the additional income of Rs. 15 lakhs. - **Section 80IA Benefit:** To claim the benefit of Section 80IA, ensure that the revised returns show a profit from the eligible business activities after adjusting for losses. - **Consultation:** It's advisable to consult with a tax advisor or a chartered accountant who can assist you in properly revising the returns and complying with the tax laws.
By revising the returns and disclosing the additional income properly, your company can rectify the previous omissions and ensure compliance with tax regulations. If you need further assistance or clarification on any specific aspect, feel free to ask!
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