Clarification Required for Ledger Balance Reconciliation
This query is : Resolved
ATUL ANAND
(Querist)
21 April 2026
What should be the appropriate course of action in this case, as per books closure and the Income Tax Act, 1961, where our ledger reflects a credit balance of ₹1.92 lakhs while the party’s records show a nil balance? Additionally, we are holding stock worth ₹2 lakhs on behalf of the party.
21 April 2026
Reconcile: Match ledgers to find the specific missing transaction.
Rectify or Write-back: If the debt is truly gone, record it as income under Section 41(1) to avoid penalties for "unexplained credits."
Segregate Stock: Ensure the ₹2 lakhs of stock is excluded from your own inventory valuation, as it is held in trust, not owned.
Rectify or Write-back: If the debt is truly gone, record it as income under Section 41(1) to avoid penalties for "unexplained credits."
Segregate Stock: Ensure the ₹2 lakhs of stock is excluded from your own inventory valuation, as it is held in trust, not owned.
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