Accounting for Interest on Tax Refunds

This query is : Open

Sandeep (Querist)
Follow

16 December 2010 Interest on refund adjusted against subsequent AY's demand. The Assessee further wents into appeal. The accounting for interest on refund to be done atthe completion of assessment. HOwever, when is assessment said to be completed when its still in appeal process? When is interest on refund accounted for as outcome of appeal is not known?

CA Manikandan.A.V

CA Manikandan.A.V (Expert)
Follow

16 December 2010 Income which is contingent in nature should not be booked on the basis of prudence principle. So such interest need to be accounted at the time of final assessment only

Sandeep

Sandeep (Querist)
Follow

22 December 2010 Thanks a lot..
However, when is assessment said to be final / completed when its still in appeal process?
E.g, if its in ITAT or CIT(A), final assessment will be after CIT/ITAT order? I mean what is defination of 'final assessment as per you.

Upgrade to CAclubindia Pro. Subscribe Now!