18 September 2007
As per Section 145A the purchases, sales and inventories to be valued inclusive of taxes, duties, cess, etc incurred or paid. VAT introduecd during the FY 2006-07. Sales effected out of opening stock also and that stock is on declaration of forms or exempted goods. Is the closing stock to be valued with VAT on such stock as well as the opening stock also. Is Vat receivable only to be added in closing stock or the actual VAT paid on closing stock should be added. Further as per new ITR in the P& L a/c the Purchase, sales, closing stock etc to be inclusive. Can we do adjustment in computation only and the net effect can be shown in adjustment. If this method is followed then will it not be treated as defective return as the P& L not prepared as required in the form.
19 September 2007
In case the accounts are required to be audited by a chartered accountant the valuation of inventories are supposed to be made as per the accounting standard for inventories. If the case is so the requirement for Sec 145A can be met by adjustment in statement of total income and as such the same can't be treated as deffective return u/s 139 of the Income tax Act 1961