Clarification Required for Ledger Balance Reconciliation
This query is : Resolved
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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