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Tax liability :Partnership firm converted in pvt. ltd. co.

Rahul Agarwal (Service) (39 Points)

24 September 2012

A Partner ship firm was converted in to Pvt. Ltd. Co. on 04.04.2011with its all assets and liabilities and the partnership firm was discontinued on that date.

The firm was having Rs. 30,00,000 as Income Tax provision for F.Y.. 2010-11 which was carried in the opening balance sheet of Pvt. Ltd. But the actual tax liability for F.Y. 10-11 comes to 41,00,000. which was paid by Pvt. ltd co. out of which 30,00,000 was adjusted through provision a/c.

Now, 1)how the Remaning 11,00,000 should be treated in the books of Pvt. ltd.co. 2) Under what head the Pvt. ltd. should show that amount as per revised Schedule VI. or what else will be the treatment of the same.

Please give your opinion . Thanks in advance.

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4 Replies

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 24 September 2012

1) Income tax paid A/c Dr. 11Lacs

To Bank A/c 11Lacs

Further, it should be noted that no deduction is allowed in income tax for any payments made to IT department.

Rahul Agarwal (Service) (39 Points)
Replied 24 September 2012

Originally posted by : Sumit Grover

1) Income tax paid A/c Dr. 11Lacs

To Bank A/c 11Lacs

Further, it should be noted that no deduction is allowed in income tax for any payments made to IT department.

The above entry has been passed in books of Pvt. ltd. co. now at the finalization of accounts for F.Y. 11-12 where to transfer the amoutn outstanding in Income Tax paid a/c.