Get Answers to 3 GST Queries FREE with Expert CA guidance from CAclubindia Pro. Subscribe Now!

Tax liability :Partnership firm converted in pvt. ltd. co.

Tax queries 761 views 4 replies

Rahul Agarwal

Service

39 Points Joined December 2009

A Partner ship firm was converted in to Pvt. Ltd. Co. on 04.04.2011with its all assets and liabilities and the partnership firm was discontinued on that date.

The firm was having Rs. 30,00,000 as Income Tax provision for F.Y.. 2010-11 which was carried in the opening balance sheet of Pvt. Ltd. But the actual tax liability for F.Y. 10-11 comes to 41,00,000. which was paid by Pvt. ltd co. out of which 30,00,000 was adjusted through provision a/c.

Now, 1)how the Remaning 11,00,000 should be treated in the books of Pvt. ltd.co. 2) Under what head the Pvt. ltd. should show that amount as per revised Schedule VI. or what else will be the treatment of the same.

Please give your opinion . Thanks in advance.

Replies (4)

Sumit Grover

Chartered Accountant

3652 Points Joined September 2008

1) Income tax paid A/c Dr. 11Lacs

To Bank A/c 11Lacs

Further, it should be noted that no deduction is allowed in income tax for any payments made to IT department.

Rahul Agarwal

Service

39 Points Joined December 2009

Originally posted by : Sumit Grover

1) Income tax paid A/c Dr. 11Lacs

To Bank A/c 11Lacs

Further, it should be noted that no deduction is allowed in income tax for any payments made to IT department.

The above entry has been passed in books of Pvt. ltd. co. now at the finalization of accounts for F.Y. 11-12 where to transfer the amoutn outstanding in Income Tax paid a/c.