A practicing Doctor, recd. a sum of Rs.11,00,000/- in June 2007 on account of sale of Medcine Formula that was developed by him. This amt. was parked in his account by the foreign company.
During the f.Y. 2007-08, he did not get his accounts audited. Now my question is how to avoid payment of tax on this Income.
One suggestion was that to show that receipt as advance for the formula to be invented and treat as current Liability in f.y. 2007-08 and accordingly sign a back dated agreement with foreign company to show this payment as refundable if Doctor fails to develop the formula( a clause to be put in the agreement)
then show related expenses in F.y. 2008-09 and with Income on credit side.
Please tell me treatment of this in computation of income anb books of accounts of F.y 2007-08 and 2008-09
21 December 2009
U can go according to suggestion.Also consider the issue of tax audit as the receipts are exceeding limit u/s. 44AB. the date for AY.09-10 has also gone. so u can prepare two agreements for two different medicine formulas. Convert part receipts in AY 09-10 and file belated return. Convert the balance in AY 10-11 immidiately
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