Treatmentof write off of liability incurred for M/C purchase
This query is : Resolved
16 May 2010
Sir,
Suppose a M/C is imported for Rs 10,00,000 in F/Y 2000-01. Then Rs 1,00,000 depreciation is claimed each year till F/Y 2008-09. But the Foreign creditor is still outstanding and payment to him has not been made yet. Now, Liability of Rs 10,00,000 is written off in F/Y 2009-10. So what should be the A/Cing Treatment?? The WDV of M/C is Rs 2,00,000 at the beginning of F/Y 2009-10.
Suppose a M/C is imported for Rs 10,00,000 in F/Y 2000-01. Then Rs 1,00,000 depreciation is claimed each year till F/Y 2008-09. But the Foreign creditor is still outstanding and payment to him has not been made yet. Now, Liability of Rs 10,00,000 is written off in F/Y 2009-10. So what should be the A/Cing Treatment?? The WDV of M/C is Rs 2,00,000 at the beginning of F/Y 2009-10.
20 May 2010
Company bought the machinery on credit basis and climed the depreciation on that as per accounting procedure since f/y 2000-01. but it didn't settle the liability to the creditor till 2009-10 and the company write off the liability in 2009-10.
in this case the portion of liability which written off by the company is the income to the company in the year in which it written off the liability......
so for the financial year 2009-10 rs.1000000 is the revenue of the company and it has to pay the tax on it.
in this case the portion of liability which written off by the company is the income to the company in the year in which it written off the liability......
so for the financial year 2009-10 rs.1000000 is the revenue of the company and it has to pay the tax on it.
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