Tax effect in change of opening balance of debotrs, stock

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2015 as per Assessment Year 2011-12 Balance Sheet, Debtors Balance was Rs. 90500/- and Stock was Rs. 82,00,000/-. when computing Balance Sheet of Assessment Year 2012-13,Opening Debtors Balance Increased to Rs, 30,00,000/-and Decreased in Stock in Trade by Rs. 22,00,000/- and the net difference adjusted with opening Capital Account.
now assessing Officer identified this variation in Capital Account,
my query is that what will be the Tax effect and is there any possible way to get relief or as much as minimum Taxation?

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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07 January 2015 It seems that some unaccounted sales are there, then only debtor balance are increased and stock balance has been reduced.
In that case Assessing officer has every right to reject the book under section 145 and may proceed with best Judgement, increasing the income of Rs 29 lacs app.(30-0.905) and may impose penalty under section 271(1)(c) on concealed income.

Therefore, in such situation it better to approach settlement commission by disclosing all relevant information in true and fair manner.

Querist : Anonymous

Querist : Anonymous (Querist)

07 January 2015 Where, Actual Sales figure has been disclosed in any previous Assessment year but the Debtors balance wrongly shown reduced by Rs 30,00,000/- and this mistake noticed in the Assessment year 2012-13, then that figure raised in Opening Debtors balance and the same figure adjusted with opening capital account, in this case a change in opening balance arises in respect of closing balance of previous assessment year, but here stock in trade is not relevant i.e. Goods Purchased during the year and same goods sold during that year,
is there any possible way to get relief ?
and if assessing officer not allowed that then what amount to be taxed, whole Rs. 3000000/- @30% (assesse under @30% slab) or 3000000/- multiply by GP rate and then tax? and the interest amount ?

further is there any benefit if I claim bad debt that whole amount of Rs 3000000/- in any subsequent assessment year?

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