ceased cash

[Mayank Gupta]

if some cash amount is ceased by the income tax authorities the in the books of accounts what will be the entry of this . and under which head this will be shown in the balance sheet.......... and will the answer will be same if the cash is ceased since 2 years ago

[CAGOPALJI AGRAWAL]

It would be cash seized with dept dr of course. We have to provide for the provision of tax liability as per law on the basis of opinion of the expert./

AI Summary

Cash seizure accounting: record seized cash as restricted asset and recognise a provision for tax liability per expert opinion. Accounting treatment for seized cash requires recording the seized amount by debiting a receivable or restricted cash account and crediting cash, while simultaneously assessing and recognising a provision for tax liability based on applicable law and expert opinion. The seized amount should be presented on the balance sheet under a specific asset caption (seized cash receivable or restricted cash), and any tax provision should be shown under liabilities. The same approach applies if the seizure occurred in a prior period, with appropriate recognition and disclosure.