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Proprietor business & salary income

Tax (Student) (165 Points)

20 February 2017

An assessee has a part-time catering business and also draws salary in cash from an organisation..

For the purpose of filing ITR, can ITR 4s be filed?

For the purpose of preparing final accounts,

Is it better to prepare final accounts (P&L A/C and Business Balance Sheet) of Catering Business?

Or is it better to prepare final accounts of Proprietor (P& L A/C & Personal Balance Sheet) showing both catering business and adding salary to capital??

Also, Can GOLD of proprietor be shown as an asset in Balance Sheet?

Can Catering Equipments be shown as an asset in Balance Sheet and depreciated at 15% value?

The purpose of all of the above is Financing from a Bank..

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 20 February 2017

" Is it better to prepare final accounts (P&L A/C and Business Balance Sheet) of Catering Business?" YES.

" Also, Can GOLD of proprietor be shown as an asset in Balance Sheet? " No need. But if you desire, can be shown.

" Can Catering Equipments be shown as an asset in Balance Sheet and depreciated at 15% value? " IF you adopt section 44AD, (ITR 4S or ITR 4 with no account case) no additional depreciation can be deducted.

Tax (Student) (165 Points)
Replied 20 February 2017

Originally posted by : Dhirajlal Rambhia

" Is it better to prepare final accounts (P&L A/C and Business Balance Sheet) of Catering Business?" YES.

" Also, Can GOLD of proprietor be shown as an asset in Balance Sheet? " No need. But if you desire, can be shown.

" Can Catering Equipments be shown as an asset in Balance Sheet and depreciated at 15% value? " IF you adopt section 44AD, (ITR 4S or ITR 4 with no account case) no additional depreciation can be deducted.

Sir

Even if the assessee files ITR 4S,

Depreciation has to be deducted in the Balance Sheet from asset & shown as an expense in P&L A/C.. And the net profit shown in P&L A/C should match with income shown in ITR 4s.. is this correct, sir?

I know there is no need for preparing final accounts in case of ITR 4s.. But still preparing them for bank finance purposes..

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 20 February 2017

"Even if the assessee files ITR 4S,

Depreciation has to be deducted in the Balance Sheet from asset & shown as an expense in P&L A/C.. And the net profit shown in P&L A/C should match with income shown in ITR 4s.. is this correct, sir? "

Ans.: Not compulsarily, but anything near about much better. Books should be prepared as per actual facts, with depreciation deduction etc., so that bank may have real picture.

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