25 September 2016
Please find below details of fire claim received by our company, please provide your suggestions for its treatment in Profit & Loss and balance sheet during FY 2015-16 and its tax implications.
(A) CLAIM LODGED TO NEW INDIA ASSURANCE CO. LTD. FOR LOSS (Rs. 25300574.69)
1) AGAINST STOCK : Rs. 1,85,20,236.69
(a) (DURING F.Y. 2012-13) Rs. 1,73,26,511.69 (TREATED AS INCOME)
26 September 2016
01. Fixed Asset claim : Capital Receipt. No tax implication. 02. Stock claim : Revenue receipt. (Extra ordinary and exceptional item)
Querist :
Anonymous
Querist :
Anonymous
(Querist)
27 September 2016
sir, i want to know the treatment of loss of Rs. 99.96 lakh (Stock Rs. 72.57 lakh and Fixed Assets Rs. 27.39 lakh) in profit & loss and B/S and whether same would be allowed as deduction in income tax???
27 September 2016
during 2012-13, the loss by fire (For Stock) must have been allowed......what was the scenario, can you please elborate the position for the year 2012-13?
Querist :
Anonymous
Querist :
Anonymous
(Querist)
27 September 2016
PLEASE READ POINT A, I HAV CLEARLY MENTIONED THAT DURING 2012-13, INCOME WAS INCREASED BY REDUCING COST OF MATERIAL CONSUMED FOR RAW MATERIAL AND STORES , WHILE VALUE OF FINISHED GOODS DESTROYED WAS CREDITED DIRECTLY AS OTHER INCOME. FIXED ASSETS WAS TRANSFERRED ON WDV TO INSURANCE CLAIM A/C.
27 September 2016
Sorry.....please give the journal entries, if you dont mind.....
Querist :
Anonymous
Querist :
Anonymous
(Querist)
27 September 2016
1) FOR FINISHED GOODS DESTROYED (INCLUDING EXCISE DUTY): NATIONAL ASS. CO. LTD. (FIRE CLAIM) DR. 14194715.69 TO CLAIM (LOSS BY FIRE) 14194715.69 2) FOR RAW MATERIAL DESTROYED: NATIONAL ASS. CO. LTD. (FIRE CLAIM) DR. 2311539 TO PURCHASE (IMPORT) 2311539 3) FOR STORES & SPARES: NATIONAL ASS. CO. LTD. (FIRE CLAIM) DR. 820257 TO STORES & SPARES PARTS 820257 4) FOR EXCISE DUTY REVERSAL ON FINISHED GOODS: (WRONGLY TWICE CLAIM OF THIS AMOUNT) NATIONAL ASS. CO. LTD. (FIRE CLAIM) DR. 1193725 TO CENVAT CLAIM 1193725 5) FOR FIXED ASSETS DESTROYED: NATIONAL ASS. CO. LTD. (FIRE CLAIM) DR. 6780338 TO FIXED ASSETS 6780338
27 September 2016
Let us go one by one..... entry no. 1....claim account having credit balance has been offered to tax??? ...that is what you mean to say...right? It means the claim (loss by fire) has been transferred to Profit & Loss A/c in 2012-13..... if yes....then as and when claim is actually received debit bank credit National Ass Co Ltd....
Querist :
Anonymous
Querist :
Anonymous
(Querist)
27 September 2016
Dear sir, You are not understanding my question , i am asking for TREATMENT OF LOSS in Balance sheet (schedule VI) and profit & Loss.
27 September 2016
in fact you are NOT understanding what I am trying to drive you at...... you are trying to take your query on a stand alone basis.....which in reality is not so it started in the year 2012-13...which inter alia includes revenue items, capital items..... Soto say...go item by item and one by one... then only you can get out of your confusion.....
27 September 2016
it seems that in 2012-13, there was an unwanted incident viz FIRE due to which there was LOSS....of raw material, finished goods, spares & stores and last but not least capital asset.... Am i right? Now I am trying to request you that go item by item as above so that your confusion can be sorted out.... first focus on raw material only....... entry passed in 2012-13, claim received in subsequent years....may be once or twice as the case may be. try to bifurcate the figures and then the exercise would be easy and clear. Once the raw material accounting is over, then proceed on to finished goods.....and so on so forth Start with raw material