Prior period property tax and interest

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Dipul mehta (Querist)
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03 January 2013 sir,
A Company paying property tax and interest on it for the year 2009- 2010, 10 - 11, 11-12,in A.Y. 12-13 how should we treat in a/c and tax? As per my view, property tax and interest (only of 09-10,10-11) thereon in a/c i show in prior period adjusment as per AS - 5, and of 2011-12 as normal way to charge to p&l a/c, IN TAX, i can claim deduction of full property tax under section 43B, of 2009 - 10, 2010 - 11, and for the year 2011 - 2012 normallly deduction taken. and for interest for 2009 - 10, 10-11, not allowed as deduction??? can i m right in my views if not then plz clarify it.

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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03 January 2013 Dear Dipul,

Property Taxes & Interst Thereon Allowed on Payment Basis in Income Tax Act, You Can Take Total Paid Amount in The Paid Year Only as Deduction.u/s 43B

Next is Accounting Treatment, Since Its a Company so Companies Act Applies, You Have to Account it as Per AS-5

Dipul mehta

Dipul mehta (Querist)
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03 January 2013 Sir,
As i am refer this case for interest on outstanding muncipal tax (Interest on o/s Muncipal Tax not covered under section 43B - CIT v/s orient Beverage Ltd. 117 Taxmann 106 (Cal), plz suggest what should be done .

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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03 January 2013 Municiple Taxes Allowed on Payment Basis in Case of House Property Income (Let Out Property), But Not Allowed din Case of Self occupied Property

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