Interest u/s 244a
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
21 April 2012
Dear Members, good morning to all. Thanks for replying to my earlier query on service tax. Now i have a query on Interest income u/s 244A of IT Act,1961. For the A.Y 2009-10, vide intimation u/s 143(1), IT department allowed interest u/s 244A for an amount of Rs.3 Crores. The order copy was received during the year F.Y 2010-11. The interest income was recognised in books of account as income in the year 2010-11. However, the assessment for the A.Y 2009-10 u/s 143(3) was recently completed and IT department disallowed few expenditures and with those additions interest u/s 244A got reduced to Rs.2 Crores. However, Company went for an appeal before CIT(Appeals) on such disallowances made and reconiged the liability thus arised with those additions in contingent liability (followed the compendium of opinions issued by ICAI).
Now my query is, whether we have to pass entry reducing the income recognised earlier to an extent of Rs.1 crore? or since all the disallowances were treated as contingent liability, can the difference of Interest income u/s 244A can also be placed in contingent liability ?
Please clarify me in this regard....
Now my query is, whether we have to pass entry reducing the income recognised earlier to an extent of Rs.1 crore? or since all the disallowances were treated as contingent liability, can the difference of Interest income u/s 244A can also be placed in contingent liability ?
Please clarify me in this regard....
21 April 2012
In my opinion the company have to pass the entry for reducing the income and can recognized the reduced income as Contingent Assets.
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