CLOSING STOCK

This query is : Resolved

harpal singh (Querist)
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15 April 2008 THERE WAS RAID BY IT DURING THE YEAR 2006-07. STOCK BY AMOUNT OF RS.00000.00 AND DEPOSIT TAX ACCORDINGLY. ( IT WAS U/S 133A) AND THE ASSESSEE MAKE THE FOLLOWING ENTRY STOCK A/C DR ( UNDER CURRENT ASSETS) AND CAPITAL A/C CR.

BUT AT THE TIME OF MAKING THE BALANCE SHEET AND TPL. THE ASSESSEE HAD TAKEN AS CLOSING STOCK IN THE TRADING ACOUNT.
THUS THERE ARE THREE ENTRY AS FOLLOWS:-

STOCK CREDITED TO TRADING A/C
STCOK CR. TO CAPITAL A/C
CLOSING STCOK UNDER CA IN BALANCE

WHETHER IT IS OK.

ABOVE ADDITIONS CREDITED TO CAPITAL AS DECALRED INCOME. U/S 133A.

QUERY :- AT THE TIME FILING THE ITR ASSESSEE HAS NOT TAKEN THE ABOVE ADDITION IN COMPUTATION OF INCOME. BUT DECLARED IN THE CAPITAL A/C AS ADDITIONS. WHETHER IT IS OK. IF NOT WHAT'S ACTUAL POSITION.

Chintan Gajjar

Chintan Gajjar (Expert)
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27 June 2008 As we have already brought Closing Stock into the Books by following Entry,
Cl.Stock. Dr.
To Capital A/c
Hence,this Closing Stock will not affect profit & Loss A/c for the Current year. In case such Stock is sold, definitely we have to debit it to trading a/c. You can show Such Stock defferently then normal stock.
Regards,
Chintan

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