TDS

Pankaj (Manager) (295 Points)

24 November 2009  

Hi

What is accounting treatment in following situation? Please explain me .

Suppose Mr A is liable for conducting Tax Audit ( F Y 06-07) . He paid Rs 20000/- as interest on unsecured loan to Mr X . But he has not deducted TDS on such transaction. After 3 years ( In F Y 08-09) Mr A had to face scrutiny. ITO noted that & Mr. A had to deposit such TDS.

Mr X is individual party . He had filed his return before arising scrutiny. Also he got his other refund .

In such situation I need your help :-

What is accounting treatment of such transaction in the books of both party. Also In which year it should be entered. 

How can Mr X claim for such refund ? 

Thanks

Pankaj Sonar