F/Y 2008-2009
SALES 100
PURCHASES 80
NET PROFIT 5
INPUT VAT 10
OUTPUT VAT 12.5
VAT PAID ON 31.3.2009 2.5
DURING THE 2009-10 THE A/O HAS DEMANDED A FURTHER OUTPUT VAT OF Rs. 2 AND ASSESSE HAS PAID SUCH AMOUNT ON 20.02.2010
Q:- WHETHER Rs. 2/- PAID BY THE ASSESSEE DURING THE F/Y 2009-2010 IS AN ADMISSIBLE ITEM UNDER INCOME TAX ACT 1961?
yes it will be admissible u/s 43B of income tax act for the financial year 2009-10 if the same is also correspondingly shown as income under Profit and loss account.........what one can do is
pass the following entry
drs ac debit..................2
to vat paid (treat it as income)...........2
then subsequently pass the foll entry
bad debts w/off ac dr..............2
to drs ac........................................2
then pass the foll entry
vat paid ac dr(show it as an exp)............2
to cash/bank.................................................2
Aggarwal Sarawagi and Co
New Delhi
CA
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Shyam Joshi & Associates
Pune
B.Com
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CAclubindia
