Teatment of expenses disallowed in previous year
This query is : Resolved
29 November 2013
Hello All,
In FY-2012-13 in books of accounts we had made the provision for future loss that may incur due to onerous contract entered during the year. We disallowed the provision in computation for FY-2012-13.Is the disallowance is correct?
In FY-2013-14 the provision will be reversed in books of accounts. How it will be treated in tax computation for FY-2013-14. Whether it will be deducted from income? if yes, under which section?
In FY-2012-13 in books of accounts we had made the provision for future loss that may incur due to onerous contract entered during the year. We disallowed the provision in computation for FY-2012-13.Is the disallowance is correct?
In FY-2013-14 the provision will be reversed in books of accounts. How it will be treated in tax computation for FY-2013-14. Whether it will be deducted from income? if yes, under which section?
29 November 2013
dear Amol,
Yes, this reversal won't result in increase in your taxable income. the principle is simple - what has not been allowed as an expense, its reversal wont account for as an income.
Yes, this reversal won't result in increase in your taxable income. the principle is simple - what has not been allowed as an expense, its reversal wont account for as an income.
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