TDS not deducted- diallowance
This query is : Resolved
22 May 2008
Disallowance of expense - in case TDS is not deducted and the amount is carried forward in inventory.
What would be the effect of the amount which ought to be disallowed
What would be the effect of the amount which ought to be disallowed
S.Srinivasaraghavan
(Expert)
22 May 2008
But what about the charges where are they debited? Dis allowanc will take place there
CA. Vineet Grover
(Expert)
22 May 2008
Hi Gaurav,
Irrespective of the fact whether the same is considered under Purchases / Inventory, the same gets disallowed u/s 40(a)(ia).
The said expense get addowed in the year in which the TDS liability is paid.
Rgds/
Vineet
Irrespective of the fact whether the same is considered under Purchases / Inventory, the same gets disallowed u/s 40(a)(ia).
The said expense get addowed in the year in which the TDS liability is paid.
Rgds/
Vineet
22 May 2008
hi every1
whether due to this disallowance my carring amount of closing stock will be reduced by that amount and consequently my opening stock for next year?
whether due to this disallowance my carring amount of closing stock will be reduced by that amount and consequently my opening stock for next year?
S.Srinivasaraghavan
(Expert)
22 May 2008
If it is debited to purchase, it will be disallowed as purchase expense. In the case of inventory it would have already been valued. How will you change it on the basis of dis allowance?
22 May 2008
So we can conclude that
if inventory consist of the following cost:-
Purchase price 100
Contract expenses 10
Transport expenses 10
Design cost 10
Thus if total cost if Rs. 130/- if TDS had to be deducted on contract expenses, transport expenses and design cost and the same not being deducted then Rs. 30/- will be disallowed and the carrying amount will be Rs. 100/-?
if inventory consist of the following cost:-
Purchase price 100
Contract expenses 10
Transport expenses 10
Design cost 10
Thus if total cost if Rs. 130/- if TDS had to be deducted on contract expenses, transport expenses and design cost and the same not being deducted then Rs. 30/- will be disallowed and the carrying amount will be Rs. 100/-?
Shyam Lal Naik
(Expert)
22 May 2008
The carrying amount will be Rs. 130.
Allowance/disallowance has nothing to do with inventory valuation. The adjustments is only in tax computation and has nothing to do with normal accounting.
Allowance/disallowance has nothing to do with inventory valuation. The adjustments is only in tax computation and has nothing to do with normal accounting.
23 May 2008
thanks a lot.
Can other view be possible i.e. valution being Rs. 100/-
Can other view be possible i.e. valution being Rs. 100/-
CA. Vineet Grover
(Expert)
23 May 2008
Gaurav,
Inventory cannotbe valued at Rs.100.
Disallowance is a penalty imposed by the Department and not a benefit to the assessee.
The entire adjustment shall take place in the computation of total income and would have no impact in the books of account.
Simple as that if your profit is Rs.100 it will be raised to Rs.130 due to disallowance of Rs.30.
Rgds/
Vineet
Inventory cannotbe valued at Rs.100.
Disallowance is a penalty imposed by the Department and not a benefit to the assessee.
The entire adjustment shall take place in the computation of total income and would have no impact in the books of account.
Simple as that if your profit is Rs.100 it will be raised to Rs.130 due to disallowance of Rs.30.
Rgds/
Vineet
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