Provision for taxation
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
01 July 2013
Dear members,
The Company has gone for appeal for the assessment year 2010-11 however, the Company has not yet received the final order but still in this year has created a provision in the current year for the Additional demand raised by the department so whether the provision can be made eventhough the final order is not received for the tribunal?
The Company has gone for appeal for the assessment year 2010-11 however, the Company has not yet received the final order but still in this year has created a provision in the current year for the Additional demand raised by the department so whether the provision can be made eventhough the final order is not received for the tribunal?
Karan Teli
(Expert)
01 July 2013
Yes. As per accounting standard 4 and prudence concept, the same is applicable. To justify more their should be higher chances of creating a provision provided reasonable amount is been quantified. The treatment is correct prima facie
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