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Project office

Supra (ERP Consultant) (45 Points)

15 March 2018

If an Italian Company set up a project office in India, then what accounting year the project office should follow i.e. whether from Jan to Dec or from April to March. ?

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4 Replies

Rahul Prasad (CA Student) (1683 Points)
Replied 15 March 2018

since it is establish in India income will be taxable in India hence it has to follow indian indian accounting year..

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Supra (ERP Consultant) (45 Points)
Replied 15 March 2018

Thanks Rahul for your reply,

Though i was inquisitive on the point that when section 2(41) of companies Act gives an option to holding or subsidiary of a foreign company to follow a different
financial year for its accounts consolidation purpose by seeking approval from CLB, then whether such option dwells with Project Offices which are operational in the capacity of a foreign company ?

Divakar (Student CA Final ) (11857 Points)
Replied 15 March 2018

But that is only for accounting purposes and not for income tax purposes... In income tax act u should follow financial year concept only....

Rahul Prasad (CA Student) (1683 Points)
Replied 16 March 2018

@ Supra ji.
since your point is valid that they can opt Jan to Dec financial year . in the act sec 2(41) say it can be used for consolidation of account from the company which is incorporated outside India.