bank opening balance treated cash deposit transactions or capital investment in books

Question BankCategory: Income Taxbank opening balance treated cash deposit transactions or capital investment in books
kollipara sundaraiah asked 7 months ago

It assessee single savings bank account show in it returns up to f.y. 19-20. but assessee AIS and TIS information download in f.y.20-21 detailes mentioned below.

  1. savings bank account -1 rs:1,25,368/- balance as on dt:01-04-20
  2. savings bank account -2 rs:1,85,210/- balance as on dt:01-04-20
  3. current bank account -3 rs:50615/- balance as on dt:01-04-20

total bank balance rs:3,61,193/- opening as on dt:01-04-20
Question:
Assessee opening bank balance amounts cash deposit transactions treated or capital investment transactions treated show in books under it act f.y. 20-21.

1 Answers
Neha answered 7 months ago

As per the detail provided in the querry, 
The assessee was having three bank accounts in FY 19-20 (2 saving and 1 current account) but in the Income tax Return Only one saving account is shown in FY 19-20.
First of all, Please make sure that income (bank interest and business income etc) are properly declared in IT return upto Fy 19-20 and tax is not evaded on income through unshown bank accounts. Tax must be paid properly. 
Now coming to your question,
Your question is about opening bank balance amount is treated as a cash deposit or capital investment in next year. Please note that this is neither a cash deposit nor a capital investment. This is the opening bank balance but not shown as closing balance in books of FY 19-20.  If your assessment for FY 19-20 is not yet completed then add the same in the books of FY 19-20 and intimate AO accordingly. If the assessment is complete then in the next year (20-21) opening bank balance is adjusted through the Prior period adjustment account. A separate statement for this Prior Period adjustment account is prepared along with all accurate detail and presented with books of the current year. 

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