hi,
a co. has made provision at closing of fin year but could not be paid on time therefore some penalty and interest had to be paid
now what will be treatment of penalty/ interest while there was no provision in previous year whether it should be transferred to P/L a/c or service tax a/c. If in service tax then on what ground because it is not a part of service tax.
Thanks & Regards
Abid Husain
Mr.Abid, amounts paid as penalties, fines for violation, non compliance of the rules governed by Acts will not be allowed as an expenditure.
YOU HAVE TO BOOK THE INTEREST & PENALTIES IN THE FY IN WHICH THEY ARE PAID IRRESPECTIVE OF THE FACT THAT IT IS PAID ON CERTAIN EXPENSES OF PY. BOOK PROFIT & LOSS WILL HAVE ITS EFFECT BUT IN INOCME TAX IT WILL BE DISALLOW.
CAclubindia
