HELLO FRIENDS, CAN ANYBODY TELL ME WHATHER A CA HAS TO MAINTAIN HIS BOOKS OF ACCOUNTS ON CASH BASIS ONLY OR MERCHANTILE BASIS.
AND PLEASE TELL ME WHETHER TO PREPARE ONLY PROFIT AND LOSS A/C IN HIS CASE.
PLS. EXPLAIN CLEARLY.
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BOOKS OF ACCOUNTS
Replies (3)
DEAR RAJKUMAR,
AS PER SECTION 145, IF IS AN OPTION TO THE ASSESSEE TO EITHER PREPARED THE ACCOUNTS ON MERCANTILE OR CASH BASIS.
HOWEVER, IF THE ASSESSEE IS A COMPANY, THEN AS PER THE COMPANIES ACT, IT HAS TO MAITAIN THE BOOKS OF ACCOUNTS ON MERCHANTILE BASIS. AND CASH BASIS IS NOT ALLOWED TO THEM UNDER THE COMPANIES ACT.
HOWEVER FOR AN INDIVIDUAL CA OR PARTNERSHIP FIRM, IT IS AN OPTION TO MAINTAIN ON ANY OF THE BASIS AS MENTIONED ABOVE. ONCE BASIS OF ACCOUNTING IS SELECTED, IT HAS TO BE FOLLOWED CONSISTENTLY. IF NOT, THE FINANCIAL EFFECT HAS TO BE QUANTIFIED AND TO BE SHOWN IN ITR...
REGARDS,
MANOJ
| Originally posted by : Manoj B. Gavali | ||
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DEAR RAJKUMAR, AS PER SECTION 145, IF IS AN OPTION TO THE ASSESSEE TO EITHER PREPARED THE ACCOUNTS ON MERCANTILE OR CASH BASIS. HOWEVER, IF THE ASSESSEE IS A COMPANY, THEN AS PER THE COMPANIES ACT, IT HAS TO MAITAIN THE BOOKS OF ACCOUNTS ON MERCHANTILE BASIS. AND CASH BASIS IS NOT ALLOWED TO THEM UNDER THE COMPANIES ACT. HOWEVER FOR AN INDIVIDUAL CA OR PARTNERSHIP FIRM, IT IS AN OPTION TO MAINTAIN ON ANY OF THE BASIS AS MENTIONED ABOVE. ONCE BASIS OF ACCOUNTING IS SELECTED, IT HAS TO BE FOLLOWED CONSISTENTLY. IF NOT, THE FINANCIAL EFFECT HAS TO BE QUANTIFIED AND TO BE SHOWN IN ITR... REGARDS, MANOJ |
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AGREED WITH MR. MANOJ
& MERCANTILE SYSTEM IS RESPECTED BY ALL THE STAKEHOLDERS
AS IT IS SUGGESTED BY INCOME TAX DEPTT.ALSO
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