Wrong carry forward of closing stock balance
This query is : Resolved
Ninad Pandit
(Querist)
23 January 2012
while doing carry forward of balances during the beginning of the year, the accountant took 10 lacs as opening stock instead of 30 lacs and adjusted the balance in capital account. Assessing Officer is telling to add 20 lacs as income. what reply should be given to him so that he does not add the amount to income.
CA Deepak S
(Expert)
24 January 2012
If the opening stock is less than the actual figure your net profit would be higher and your tax liability would be higher. If the AO is going to add the difference to income you will be taxed twice for twenty lakhs, even though if accounted properly your income would have been less by twenty lakhs. Pointed out these factors to the AO
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