Form 3cd audit

One of my clients hai reported bank guarantee under head of 21 g of 3cd report which related to contingent liabilities 

We have received notice under section 143(1) 

Department raised demand of tax 

As department included the bank guarantee in profit and loss account 

Calculated tax

 


Attached File : 2604367 20211217182433 3cd.pdf downloaded: 64 times
Replies (1)

Summary: A bank guarantee is a contingent liability, not income. The tax department’s demand likely stems from a technical error where they mistakenly treated the disclosure in Clause 21(g) of the tax audit report as taxable income. You should file a rectification request under Section 154 clarifying that this was a disclosure of a liability and not a P&L credit.

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