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Unrecorded stock

Others 267 views 7 replies

Suresh Parmar

147 Points Posted on 05 December 2020

please experts advice me in below situation:

1. i am filing my return u/s 44ad
2. my stock as on 31.03.2019 was Rs. 10 lakhs as per book and itr ( not preparing account stock wise)
3. now during year i came to know that due to software errors my stock was wrongly shown as Rs. 10 lakhs but actual it was Rs. 15 lakhs as in 01.05.2019.
4. my itr for f.y. 2019-20 is pending,

how to book closing stock with Rs. 15 lakhs and if i do so my profit in book will increase but i m filing return u/s 44ad , if i do so my income as per PNL and itr will not match and if i do so whether it can be valid .?

kindly help me in this critical situation.

Replies (7)

yasaswi gomes

My grammar is 💯 good I

7301 Points Posted on 06 December 2020

I understand your tax concern, but the accounting concerns advises faithful representation of all transactions. So, it is mandatory that one has to rectify errors first and deal with tax consequences later.

Suresh Parmar

147 Points Posted on 06 December 2020

Thank you for your kind reply
but how to add stock in this f.y 2019-20
i m maintaining account without inventory and whether can do as by debiting purchase

yasaswi gomes

My grammar is 💯 good I

7301 Points Posted on 06 December 2020

Hi if your using a book keeping software, it is difficult to explain because sometimes, adjustment journals will be raised in different ways for different software's eg., tally vs oracle Etc. Purchases are debited, your correct, and increasing the value in purchases book along with tax or passing a adjustment journal will do the job.