Accounting treatment

CA Sanjay Baheti (PROPRIETOR) (1155 Points)

15 February 2010  

My client being a Partnership Firm engaged in manufacturing of disposable products.It has already commenced its business since F.Y.2008-09. Now in the current year it has applied for Power Subsidy to state level Concerned Authority. The Assesse is expecting to receive said subsidy in the year itself. in fact the subsidy  is reimbursement of Power bills paid in earlier months & relief in power rate for subsequent periods in power bills.

how is to be trreated in books the same.(i.e. either as capital receipt to be apportioned among the partners in P/lL ratio or as revenue receipt or any other manner.


CA Sanjay Baheti