Dear members of CAclub,
Even though i am not a finace professional to write on the captioned subject ,since i come accrosed various articles where in it was stated that the above said ICDS have to be followed by all assessees following Mercantile system of accounting.
The above statement was understood by many people to the effect that if they are following cash basis of accounting,then they need not follow icds
I respectfully disagree with the above understanding as an advocate and wish to state here my observations on the above said notification as under.
The CBDT govt of india had issued the above notification where in it can be observed ifrom the pramble that it is not for the purpose of maintenance of books of accounts.Again in the same notification under the caption Disclosure of Accounting Policies in clause 9 cbtd have categarically stated that ,"If the fundamental accounting assumptions of Going concern,consistency and Accrual are followed ,specfic disclosure is not required. if a fundamental acc*nting assumption is not followed,the fact shall be dis closed".
In otherwords the icds can be observed if the assesssee is following is accrual /mercantile system of accounting,otherwise the other assessees who are all following cash basis of accounting have to make a specpecfic disclosure with regard to ICDS.
It pertinent to mention here that the above ntification has been issued in accordence with sec 145{2} income tax act 1961 and came in to effect wef 1.4.15 ie f/y 15-16 onwards.Not making the accounts in accordence with the section 145{2} gives the AO to invoke the powers given under sec 145{3}.
Since i observerd that many of my Learned brothers are differing with my views ,i thought is wl be better to express my views on the said subject as above.
I will be happy to hear you all on this.
Thanking you,
R.sathyanarayanan.
m-09940541805 MAIL-timelyjustice @ gmail.com.
CAclubindia
