I have a query that what does the treatment of sale return, if it pertains to earlier years? if we net this with current year sale then it does not effect current year revenue and gross profit? it is not prior period item? which should be adjust in for calculating Net Profit. In my case, there was revenue recognized in earlier year,say Rs. 100 cr. for 2011-12, subject to reconciliation on unit sold. latter on in current year after reconciliation with client, previously raised bill cancelled by Rs. 100 cr. and new bill for 2011-12 is issued by Rs. 80 cr. My question is that: Is this Rs. 20 cr. prior period item as per AS-5 ? and how it is present in accounts? and also what tax implication , allowed/disallowed? I have some my point of view, I want to confirm/modify after this discussion.
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Prior period item ?
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as per the provision of A S 5 prior period item adjust in current year profit and loss account so cancel invoice of rs 20 cr adjust in current year profit and loss account and assessee can revise the income tax return in specified period i e 1 year from the end of the relevant assessement year
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