Income tax riad / search seizure
This query is : Resolved
01 January 2013
Hello Friends,
I wanted to know the accounting treatment in case of a Raid / search seizure. For eg. a person discloses an income of 1 crore for previous years (say 2007-08, 08-09, 09-10) after raid and accordingly has to pay 40 lakhs as tax, interest and penalty. How should this be treated in the books of account for Current year.
I wanted to know the accounting treatment in case of a Raid / search seizure. For eg. a person discloses an income of 1 crore for previous years (say 2007-08, 08-09, 09-10) after raid and accordingly has to pay 40 lakhs as tax, interest and penalty. How should this be treated in the books of account for Current year.
01 January 2013
If a person discloses an income of Rs.1 crore on raid / search cases, either he might have created the corresponding assets or have the sources of income.
Entries for Assets can be passed if same are created. If sources of income are ascertainable, same can be treated as his Capital employed.
In case of Tax payment, it shall be treated as Drawings in his books of accounts.
Entries for Assets can be passed if same are created. If sources of income are ascertainable, same can be treated as his Capital employed.
In case of Tax payment, it shall be treated as Drawings in his books of accounts.
01 January 2013
The concerned assessee is a company.
01 January 2013
As far as assets and income are concerned, same can be appropriated to respective years in books of accounts based on evidence and facts, documents etc.,
Income tax payment may first account as revenue expenditure by debiting to profit & loss account and same can be disallowed while filing ITR.
Income tax payment may first account as revenue expenditure by debiting to profit & loss account and same can be disallowed while filing ITR.
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02 January 2013
Respective Assets (or Cash if cash is seized)will be debited and appropriate amount will have to be taken as income
Normal entry will have to be passed for tax expense
If no order finalizing tax liability is received from dept then till such order is received, then account for asset seized as Deposit/asset seized
Normal entry will have to be passed for tax expense
If no order finalizing tax liability is received from dept then till such order is received, then account for asset seized as Deposit/asset seized
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