Peanlty for delay in accounting of incomes

This query is : Resolved

sushil (Querist)
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29 December 2010 Dear All,

we accounted a bill for repairs & maint building for rs.1250,000/- in f.y. 08-09 as per bill date mentioned in t bill le. 06.02.09. we deducted tds @ 2.266% on same date. We deposited tds on 06.04.09.
we paid entire bil amt net of tds in f.y.09-10. we filed etds return for 4th qtr in time.

However civil contractor accounted this bill in f.y. 09-10. IT department issued notice to civil contractor, asked to pay penalty for delay in accounting of incomes.

CA of civil contractor advised us to revised our e tds return by deleting above tds entry. otherwise he will prepare a bond stating that bill rasised on 06.02.09 was estimate bill, his accountant made mistake & mentioned date as 06.02.09 instead of 06.04.09, if we denied to revised e tds return.

Pls advise me what will be the solution for above.

Thanks in advance.
Sushil.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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30 December 2010 The revision of TDS return can not be viewed independent of the books of accounts. Since you have booked the expenses in the FY 2008-09, it may not be possible for you to revise your return so as to reflect the transaction in the FY 2009-10.

If the 2nd option is feasible, this should be adopted.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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02 January 2011 You have done correct accounting and TDS deduction. Eventhough bill is estimate , TDS has to be deducted on liability.

Contractor can submit the reply that final bill was raised in the year 2009-10.

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