A Ltd. purchased goods on credit for ₹ 40,000 during P. Y. 2018-19 and maintains books of account on accrual basis. The same was allowed as an expense during 2018-19. The company made the payment in P.Y. 2019-20 hut it paid in cash. Choose the correct option:
A. The payment will be taxable as business income for P.Y. 2018-19
B. The payment will be taxable as business income for P.Y. 2019-20
C. The amount will not be disallowed later.
D. None of the above
Answer:B
A Ltd. purchased goods on credit for ₹ 40,000 during P. Y. 2018-19 and maintains books of account on accrual basis. The same was allowed as an expense during 2018-19. The company made the payment in P.Y. 2019-20 hut it paid in cash. Choose the correct option:
A. The payment will be taxable as business income for P.Y. 2018-19 B. The payment will be taxable as business income for P.Y. 2019-20 C. The amount will not be disallowed later. D. None of the above