Adjustment of fd made in the year 2010 which is not booked

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 A charitable Trust has made an Fixed Deposit in the Year 2010, due to some reasons the same amount has not been shown in the books but later client wants to show such amount in the current year, how the adjustment should be made now, should it be added to Corpus Fund and what is to be done w.r.t Interest earned for the 2 Years on such Fixed Deposit, should it also be added to Corpus Fund

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
Follow

22 August 2013 then it should be booked in books of as prior period item and must be adjusted in corpus fund.
Int will be income of the trust.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
Follow

22 August 2013 Agree with Tushar

Please make further inquiry, know whether these are only investment which are not shown in the books of Trust or sum still remains to be accounted in Books.

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 how come Interest earned for the previous 2 years will be the income of the Trust in this year

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
Follow

22 August 2013
Yes Since last year Trust fails to disclose Income, either by Mistakenly or deliberately.

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 but Income of the Last Year cannot be clubbed with the Income of the Current year i.e., last 2 years Interest on such FD ca't be shown along with current years Interest Income Earned

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
Follow

23 August 2013 that is why there is a concept called adjustment as prior period item where previous errors or mistakes are incorporated in books of accounts in current year to reflect true and fair view of the financial statements viz. income & exp a/c or profit and loss a/c & bal sheet.

Income of past 2 years accordingly shall be clubbed in current years income else concealment penalty may be imposed for income sought to be evaded u/s 271(1)(c).

Hope now all your doubts are cleared.