How to deal with omission of Asset Purchase in the next financial year

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This discussion addresses how to handle an asset purchase from December 2020 that was mistakenly omitted from the balance sheet and P&L, meaning no depreciation was claimed. The advice given is to add the asset in the 2021-22 financial year at its original value and claim depreciation only for the current year. It's also clarified that there's generally no need to inform the IT department about this omission, provided the bank account reflects the payment and the books were not audited in a way that would flag this.

Avi

Avi (Querist)

28 December 2022 We purchased Assets worth 2 Lacs in 2020 December, for which cheque payments were made. But forgot to include the same while preparing the balance sheet. Hence it neither reflected in the balance sheet, nor its depreciation availed in the P&L.
How do we include this in the next financial year's BS i.e. 2021-22. at what value ?
Can we charge the last year's depreciation in 2021-22 ?
Do we need to intimate the IT Dept for this omission ?

Thank you

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

28 December 2022 Add and depreciate in 2021-22 at original value and depreciate for the year only.
No need to inform to IT department.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

28 December 2022 Whether the books of accounts were audited? OR TAR submitted along with ITR?
Where the amount of 2 lakhs paid through bank account adjusted?

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