Reduction of taxable income

This query is : Resolved

Jay Chakraborty (Querist)
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23 March 2020 A body corporate was charging revenue from one of its customers based on unilateral revision of the revenue, to which the other party never agreed to. They kept on paying at the old rates. The body corporate booked such excess revenue as outstanding debtors and paid corporate tax accordingly.

This situation continued for several years until the body corporate decided to such practice and started charging revenues at the old rates.

Now the body corporate plans to adjust the excess income charged and booked as debtor so far against the income of the current year as reduction of income. By doing so, they will take the benefit of reduction of tax liability.