write off unclaimed balances
This query is : Resolved
29 June 2008
how to proceed with the write off the unclaimed balances showing in a balance sheet as a refundable security/EMD
(I) if we write off the same after 3 years of completion of work as per 'Law of Limitation' then what is the remedy if the creditor lodge the claim after write off the same?
(II) If we write off it in profit and loss account then whether it is taxable or not and whether it is available for dividend or not?
(III) As per company law whether it is capital reserve or revenue reserve in both situation if the security retained for capital project or for contract of trading nature?
(I) if we write off the same after 3 years of completion of work as per 'Law of Limitation' then what is the remedy if the creditor lodge the claim after write off the same?
(II) If we write off it in profit and loss account then whether it is taxable or not and whether it is available for dividend or not?
(III) As per company law whether it is capital reserve or revenue reserve in both situation if the security retained for capital project or for contract of trading nature?
01 July 2008
Subject to law of limitation it can be written back and treated as income and it is very much taxable. Under companies act it is very much revenue reserve and available for dividend
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