treament of supressed asset

This query is : Resolved

Sarbendra Das (Querist)
Follow

03 September 2009 suppose I had suppressed an investment in share from income tax. Now in scrutiny department had found that and charged the tax on the income derived from it. Now I am confused about accounting treatment of disclosing that asset in my book. please suggest proper accounting treatment. Refer, if any, accounting standard about this?????

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
Follow

03 September 2009 Unexplained investments.

SECTION 69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the 75[Assessing] Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.

PLEASE CLARIFY THE YEAR OF INVESTMENT??

Kaustuv

Kaustuv (Expert)
Follow

03 September 2009 I suppose you want to know the accounting entry to bring the asset live in your books of accounts. Before that, its important to know that what accounting treatment you have done before to hide the asset from your books of account. There could be multiple possibilities. I assume for simplicity sake that you have charged off the expenditure in books in disguise. Now the books of account has closed. You have to bring the asset back by crediting in the P/L account. This item in my mind would be a prior period item. Why I think so is that as per AS-5, prior period item can also arise for misrepresentation of fact in the earlier period. Let me know your views.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now