construction-2

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2010 Hi
Repested Member

Can any one tell me?

I am filing return of construction business of a party in my office.

In profit and loss account they disclosed 1 crore exp. in constrution site during the previous year.

And none income is recognised and such 1 crore exp. is net loss.

So what to do for recognised income, because according to matching concept this is not right and what method to apply for recognised income.

And construction is still continue.

and alos deposit received agaisnt 20 flat is shown as current liabilities.

And also capital a/c showing negative balance i.e. repayment of capital by bank account.

Thanks in
advance sir/madam

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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01 August 2010 The work completed so far is not expenditure. It would be transferred either to Construction WIP or would be treated as part of income as per percentage of completion method.

Better take advice of a practising CA showing him all the details to avoid future legal complexities of Income-Tax.

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