08 January 2014
A Pvt Ltd Co. has not recorded a bill in the preceeding Financial Years on which VAT is levied. But the Co. has made the payment to creditors on 06/01/2014 through cheque. We are Builders & Developers eligible for Composite Scheme on MVAT.i.e. we are not claiming Input Tax Credit.
CAN A PVT. LTD. RECORD THE PURCHASE BILL OF PRECEEDING YEARS IN THE FINANCIAL YEAR 2013-14 ??
09 January 2014
Prior period items are income or expenses which arise in the current period as a result of errors or omissions in the preparation of the financial statements of one or more prior periods.
Prior period items are normally included in the determination of net profit or loss for the current period. An alternative approach is to show such items in the statement of profit and loss after determination of current net profit or loss. In either case, the objective is to indicate the effect of such items on the current profit or loss.
The company have to record the purchase along with all associated expenses (freight, Entry Tax, Custom / Excise Duty etc.)in current period as relates to prior period.
14 January 2014
Sec. 37 of the Act provide general deduction to all expenses not being any expenditure covered u/s 30 to 36 not being capital or personal expenses not being incurred for the purpose which is an offence or prohibited by any law but laid out or expended wholly and exclusively for the purpose of the business or profession.
Omitted purchase would allowed in the year of omission on the above ground and in the next following year it will be allowed on the same ground due to omission.
In filing return (ITR 4, 5) and tax audit report the figure shall required to be disclosed as prior period items.
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