wE HAVE MADE A CLAIM ON CUSTOMER REGARDING RECOVERY OF INTEREST FOR NON PA YMENT. WHETHER IT MANDATORY TO SHOW THIS IS INCOME. IF YES THEN IN INCOME TAX WHETHER IT IS TAXABLE AS THE INCOME WOULD BE RECEIVED ONLY WHEN THE THINGS WOULD BE SETTLED WITH THE PARTY.
IN THIS CASE WHY I WOULD PAY TAX ON INCOME WHICH IIS NOT CERTAIN
As per the requirement of AS 9 you must not recognize it as a income as its not sure to be received.and its not normal or regular interest which should be recognized on time basis.
and in income Tax we take profit and gain as per commercial accounting practices & adjustment is made for section 30 TO section 43C.
since its revenue nature of income & should be treated as a incidental to business and have no specific provision under income tax Act.it must be treated as per commercial accounting practices that is AS 9 for this matter.
i might be wrong being a student and learner,let me learn too if i m wrong.
Thanks
CAclubindia
