Accounting entries on scrutiny assessment made u/s 143(3)

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05 November 2014 An assessment was completed u/s 143(3) by making an estimation of income on gross receipts say from 2% to 5%. How to pass entries in the Books of Accounts. Can we recognize the difference of 3% profit in the books of accounts by crediting P&L A/c and debiting cash.




05 November 2014 Income tax demand Dr..................
To Cash/Bank................................

05 November 2014 You dont pass entries in the books for change in assessed profits. Just pass entry for additional tax paid

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Querist : Anonymous

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Querist : Anonymous (Querist)
05 November 2014 Is there any reason for not passing entry for difference profit of 3%. Why entry for additional tax alone should be passed.

05 November 2014 because books are made as per accounting rules. disallowance in taxation doesn't mean your accounts change...


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