Journal entry

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jyotiba lohar (Querist)
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17 September 2013 Dear sir,
how & where to account this disallowed expenses in under income tax act ex.
1.penalty paid to vat office
2.Bank Opening balance difference
3.cash payment 20000 above

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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17 September 2013 Question not clear, Which are asking. Is your view how didn't such disallowed expenses disclose to the IT department which computation of taxable income. Or passing of entries in the books to get the profit as per P&L and as per IT.

Please give clarification. Generally even though such disallowances applied entries in books shall be pass as a normal entries passing but such adjustments shall be made at the time of computation of total income.

So please give me clarification what you want exactly.

OM SAI SRI SAI JAI JAI SAI

jyotiba lohar

jyotiba lohar (Querist)
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19 September 2013 Thanks for reply
but I want know about the above entry in the books to get the p&l as per IT Act

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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19 September 2013 The above are doesn't allowed as per IT act as expenditure. So you want to your P&L account should be same with the IT profit.

Then Give debit to the capital account and credit to the concern account.

For example

Capital a/c dr
To Cash/bank accunt
(Being penalty paid to the CTO for ........)

In case earlier you already given debit to vat tax a/c(expenditure head account)

then pass the following journal entry

means earlier you pass the following entry

Vat a/c dr
To cash/bank a/c

So now pass the following JV

Capital a/c dr
To Vat a/c

(Being penalty paid to the CTO is transferred to the capital account)

The above entries i said on the assumption of the assessee is either individual or partnership firm.

In case it is other status then please report the status.

If you want any further clarification please post your doubt.

OM SAI SRI SAI JAI JAI SAI