accounting treatement of Previous Year exp

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Anil Kumar Sood (Querist)

15 July 2009 Hi Friends

Background
We are in receipt of Two inovices for April 09 & March 09 on 5th April 09 for professional services received by our company. but due to absence of final MSI (must required for approal of Invoice) invoices are passed and approved in July 09.

Problem
1. if we book the inovice in July 09. Then as per Sec 37 the whole exp will be disallowed in assessment or by auditors objection will be raised.
2. If we book the expenses on back date i.e. 31st March 09 then delay in TDS is their as the last date for deposit of TDS on amt paid/credited on 31.03.09 is 31.05.09. Also delay in issue of Form 16A will aslo be their. Again TDS return for last qtr have already been filed we need to revise them.
3. Can we avoid the above problems by booking the invoice in July 09 and creating the provision as on 31.03.09 for these expenses. What are the implications of AS-29(provisons & contigencies) in this regard. It is to be noted here that the balance sheet of the company is still under progress and same will be finalized in August 09.

dear friends please reply with quoting exact references of sections & accounting stantdards

Chandresh Pitroda

Chandresh Pitroda (Expert)

15 July 2009 There is no harm to book March exp in July'09. We can easily justify the same that bill has been recieved late.

TDS is to be made on the basis of Booking of Exp or Payment of bill. As you said you have not booked so it is presumed that you have not paid the bill. So, TDS liability arises on This year only.

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