LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Hybried system of accounting

Pradip Shaw (Practice) (227 Points)

03 August 2011

An individual contractor dealing with plant set up contract job, during 2007-08 total bill RAISED to a particular debtor Rs. 2 cr 74 lacs. Actual pmt received Rs. 2 cr 26 lacs on which tds deduted @ 1% ie,2,26,000. Concern's usal practice is showing income on the basis of TDS certificate, ie 2.26 cr.

Now dept issued a notice containing that company charged entire expenses on the baais of accrual basis of accounting but income was shown on cash basis. which is not allowed and added the balance fig of Rs. 38 Lacs as income and charge Interest & Penaly?

How I represent the case in our favour ???

Reply
Follow
Share

5 Replies

CA Sandeep Kumar (Audit Assistant) (804 Points)
Replied 03 August 2011

This case cannot be turned in assessee's favour for the reason that, income should have been what is billed and certainly not what is received.

In your case since the debtor has paid only 2.26 cr against 2.74 cr, the difference should lie in the debtor's account and such balance cannot be deferred to future years.

I think the department is correct in its stand.

Hybrid system of accounting cannot be done at all, that one for income and another for expense!!!

Hybrid system of accounting however can be adopted by assessee in case he has different businesses.

Pradip Shaw (Practice) (227 Points)
Replied 03 August 2011

Dept always wrong, I already manage todays and my dear it is possible by hook or cook

CA Sandeep Kumar (Audit Assistant) (804 Points)
Replied 03 August 2011

I replied to the issue raised and the position of law in our country. And if you have other means to convince the Income Tax department, and if the said issue of hybrid system of accounting in a single business was allowed by the department, please mention the arguments in your favour.

Pradip Shaw (Practice) (227 Points)
Replied 03 August 2011

under the table everything is possible

CA Sandeep Kumar (Audit Assistant) (804 Points)
Replied 04 August 2011

Originally posted by : Pradip Shaw
	under the table everything is possible

Yeah right..

You are unfit to be a citizen of this country. When the nation is struggling to bring black money from outside India and also to control corruption in our country, professionals (if you are one) like you are encouraging it.

I can understand, people with little or no abilities do indulge in illegal activities, say '' under the table '' !

You will never learn anything because you have the habit of convincing tax authorities in a different way '' under the table '' !!!

No wonder you have not been able to even mention the correct spelling of the word mentioned below your name, ''profesion'', what does this mean my dear friend?

Don't worry, nobody will question you about that word, even if they do so, anyways we can bribe them too ''under the table'' !!!