Tds credit taken by chartered accountants firm

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This query is : Resolved

Meet (Querist)

01 July 2014 Dear Sir,

In case of Chartered Accountants firm, the firm follows Cash system of accounting as it is allowed by the law. Hence normally with respect to the tax audits, the firm raises the bills in October (which is within the Service tax Rules ie 14 days from the completion of service).
However, the organizations whose audit is done, they book the bill in March itself and deduct TDS as per provisions of Sec 194J of Income Tax Act.
My query is in which year shall the CA firm take credit of such TDS deducted? Is it to be taken in the year in which bill is raised or as per 26AS which will show TDS credit in respect of bills which are not even raised by the firm yet?
Kindly explain.

Thanks.

Ganeshbabu K

Ganeshbabu K (Expert)

01 July 2014 Income will be recognised as per books of accounts maintained by you
.
.
TDS credits will be claimed as per TDS certificates or FORM 26AS as reflected in respective assessment year

Meet

Meet (Querist)

01 July 2014 Thanks Mr. Ganesh.

But then how can we take credit in respect of such income which is not even recognized by the firm in the books of Accounts? Won't the Matching concept be violated?

Isn't it necessary to first book the income against which we are going to take the Tax credit?

Ganeshbabu K

Ganeshbabu K (Expert)

01 July 2014 It is not possible to create Provision for income which also against fundamental accounting assumption
.
.
It is okay to claim TDS credit as per 26AS or TDS certificates as we maintain books properly