Understating of stock in previous years

This query is : Resolved

Devendra Singh (Querist)
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01 July 2013 Dear Experts,

My query is regarding erroneous understating of closing stock in FY 2009-10. The assessee got his BOA audited u/s 44AB, but neither the CA nor the assessee could find that error in which his closing stock was taken short by Rs.190,000. His that year's stock statement shows the following figures:

His op St was 260000
Purchases 135000
Sales 75000
Cl st shown 130000 (it shud hv been 320000)

Now during his assessment in sales tax dept. this error has come out, and he wants to know what can be done?? We cannot revise his income tax return, nor we can show different figures in income tax dept and sales tax dept.

Plz advise what shud we do to avoid adverse consequences???

Karan Teli

Karan Teli (Expert)
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01 July 2013 Treat it as prior period item as peraccounting standard 5. Provide enough disclosures on face of profit and loss account and also in noted to accounts. It qualifies as prior period since there was an error or omission of an item on prior periods which was detected know and has an effect currently.

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Karan Teli

Karan Teli (Expert)
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01 July 2013 No revision of returns in any kind is required.
just move on normally with return filing procedures

Devendra Singh

Devendra Singh (Querist)
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01 July 2013 so, will it be ok if we show different figures of closing stock in audited B/s and the stock statement submitted to sales tax dept.??

Karan Teli

Karan Teli (Expert)
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01 July 2013 Do you think it's ok.?
its certainly not, but you need to convince them and I don't require you to tell hoe do we convince department ppl. If this error is material simply file revise returns every where

Karan Teli

Karan Teli (Expert)
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