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effect of dep taken as per I.T. in BOA of pvt ltd co.

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MONISH (Querist)
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19 November 2009 A pvt ltd company has maintained depreciation as per Income Tax Act in their books of accounts. how do i rectify the mistake. what effect needs to be taken.

Zeeshan

Zeeshan (Expert)
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20 November 2009 considering the case is related to the current year or the year for which audit is not conducted yet:
1. calculate the depreciation as per companies act, 1956 as per the rate prescribed in schedule 14.
2. pass the necessary rectification entry in the books of accounts.
3. correct the dep. schedule and financial statement, reapproval by the board of FS.and consider the same for audit!

If management is not agree then you have to qualify the report for audit purpose. and as far as income tax is concern it has no impact that what enty is done in the books the dep. will be allowed as per IT act only.

if previous period is there then check the audit report, whether it is qualified or not? if not qualified then auditor is guilty for gross negligence.

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