i-t treatment of supplementary invoices

A Prop firm raised supplementary invoices in the month of april may 2010, for increase in the prices of steels, the original sales were made in the financial year 2009-2010. My query is whether we can make provision for income related to supplementary invoices in the financial year 2009-10. what is the tax implications whether this income is taxable in the ass. year 2010-11 or in nxt assessement year. As per accounting standards issued by ICAI AS -4 it is an event occuring after the balance sheet date according to that we have to make adjustments in assets and liablilites in the balance sheet for the f.y. 2009-10.

Please resolve my query it ll highly obliged

1. can v make changes in assets & liabilities in the balance sheet as at 31.03.2010 if yes should we make provision for excise receivable as well as per AS-4

2. what are the tax implications whether this income will be taxable in ass. year 2010-11 as per mercantile system of accounting u/s 145

3. and if this can be treated as events ocurring after balance sheet date then would would happen if the same supplementary invoice would have been raised in june 2010 after the balance sheet is signed?

please quote relevant sections if possible

Thanks & Regards

vartin jain

Interesting.

Am no expert but would want to express my point of view. From what i und it is an Additional evidence for an event existing as at the balance sheet date since it has occured between the balance sheet date and the date of signing the audit report. So based on the intention of the management to claim the price difference it would be considered as an adjusting event and provided for in the books by adjusting necessary accounts like sales, drs, excise records.

Goes without saying that if the price difference occurs after the date of signing the audit report there can be no effect on the numbers in financials.

Treatment in IT would be no different (Assuming that it is a Company/Level1/Level2 enterprise and has to necessarily follow AS) and the invoice raised for such a price difference would be considered for the computation of total income.

Please feel free to correct me.