Income tax liability when arises?

136 views 5 replies

Srinivas V

Self

45 Points Joined June 2011

Income tax query:Please let me have your views.

Income tax assessment of A Ltd. Is completed by assessing officer determining tax liability of Rs. 100 crores. The additions made are challenged before Commissioner (APpeal). As this is disputed liability, amount of Rs. 100 crores is shown as CONTINGENT liability.

Commissioner (Appeals) rejects company’s appeal. The company files appeal with Tribunal. The Tribunal finds some latches in assessment and hence, remands the matter back to Assessing officer for de novo assessment.

Now the question is: Tax liability of Rs. 100 crores is a contingent liability or not? Whether the company or auditor has to make any disclosure in the accounts?

Replies (5)

veerendar singh

tax consultant

3306 Points Joined October 2018

Accounting, reporting and disclosures have nothing to do with assessment/appellate orders. contingent liability will be detwrmined as per standards on accounting and reporting.

SUSHANT BIDAYE

710 Points Joined May 2017

The matter of disclosure of contingent liability is a matter of judgement.

as of now there is no demand.

you may choose not to show anything as contingent liability or may recognise 30 %/50 % or so depending on your judgement