Tax Assessment - Acquired Entity

A/c entries 548 views 2 replies

All the  assets and liabilities of  a partnership firm was taken over by a company. The partners of the firm have subsequently become the shareholders in the company. The assets taken over by the company included "Advance tax" of Rs. 1 lac paid by the firm. The Income tax department completed the assessment and gave a refund of Rs. 80,000/- only, thereby adjusting Rs. 20,000/-.

Please let me know the accounting entry that needs to be passed in the books of the company for Rs. 20,000/- .

Thanks in advance.

Replies (2)

good query...

did u think of it or came across in articleship..?

will it be treated as pre-incorporation / prior period  item..??

As per my discussion with a senior CA, I was adviced to adjust it against goodwill on acquisition.


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