Method of accouting u/s 145
HIMANSHU SHARMA
(Querist) 18 May 2013
This query is : Resolved
We follow receipt basis of accounting for interest on FDR instead of accural basis of accounting. This practice is followed consistently. In regular scrutiny the AO added the difference amount in total income(interest as per accrual basis less interest as per receipt basis)(reason stated in scrutiny asstt order being TDS fully claimed but interest partly paid on receipt basis). Need your support on following points: 1. We had paid tax on interest on receipt basis after two years, now if we pay tax as per order U/s 143, there would be double payment of tax on same income. Further the time limit for revision of all the above referred returns has lapsed since the assessment is done. Now what procedure do i have to follow to avoid double payment of tax. 2. Advice for ground of appeal to ITAT Appeal.
Anirudh
(Expert) 18 May 2013
When you are regularly following a particular method, and on that basis earlier assessments had taken place, you have to challenge the Assessment Order wherein the ITO is trying to assess the interest on accrual basis instead of on actual receipt basis.
If you accept the order and then pay the penalty also, then you will definitely end up with the problems posed by you.
R.K Nanda
(Expert) 18 May 2013
no more to add.
