Debit Notes

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CA Gaurav Rastogi (Querist)
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30 April 2009 Dear Sir,

We had booked bill raised in year 08-09. This party had made some deductions on account of TDS and some more deductions. But teh party did not share this information with us and balance remained in our books in the name of the party. Later on recionciliation of their account, we were intimated that due to mistakes in providings services this amount had been deducted and debit note were raised in our names. Now how these debit notes are to be accounted for in our books. Should we reverse the revenue recognised or we should the loss incurred seprately or as discount?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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30 April 2009 You obtain the Certificate of TDS from the party as you will get Income Tax Credit for that. Ascertain the amount of TDS from Debit Note. On the basis of the Party Debit note (or generate Credit Note against the same of your Company) Credit party Account and Debit to TDS A/c and Discount A/c. The above entries may be passed in the Accounts of FY 2008-09 or say as on 31.3.2009 assuming that 2008-09 is FY 2008-09.

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