Clarification Required for Ledger Balance Reconciliation

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ATUL ANAND (Querist)
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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.

Aashok Kumar Sharma online

Aashok Kumar Sharma

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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.

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