This is the high time for Tax Audit Season. Are you worried about the ICDS disclosure requirement in clause 13 (f) of Form 3CD?

Don’t worry!!! Here, the attached sheet contains the Glimpses of ICDS wise disclosures.

If you have any questions or concerns, don’t hesitate to let me know and I look forward to hearing from you.

“A mountain is not higher than your confidence, because it will be under your feet, if you reach the top. Which option you want to choose “CAN I” or “I CAN”? It all depends on you”

I. Accounting Policies

All significant accounting policies adopted are disclosed in the notes to the attached financial statements.

II. Inventories

Option 1

a. Inventories are valued at lower of Cost and Net Realizable Value. The cost has been measured at FIFO / Weighted average basis and includes cost of purchase, cost of services, cost of conversion and other costs incurred in bringing them into their present location and condition. Also refer clause 14 (b) to Form 3CD

The inventories has been valued using standard costing technique as a measurement of cost and it approximates the actual cost

Clause 14(b) of Form 3CD

Deviation in method of valuation of closing stock in respect of VAT / CENVAT from that specified u/s. 145A –

Stock is valued at cost or NRV whichever is lower, excluding taxes, duty etc. which are subsequently recoverable. Closing Stock represents unsold purchases, since purchases have been recorded exclusive of tax, duty etc., cancellation through closing stock valuation is done on same basis. As there will be no impact on P/L chargeable to tax.

Further, this treatment is supported by under mentioned decisions that inclusive method of stock is revenue neutral:

i. Berger Paints India Ltd. Vs. CIT 187 CTR (SC) 93.

ii. CIT Vs. Indo Nippon Chemicals Ltd. 261 ITR 275 (SC)

Option 2

b. The total carrying amount of inventories and its appropriate classification is provided in attached financial statements. Also refer clause 14 (a) and clause 14 (b) to Form 3CD

(*) The total carrying amount of Inventories is as under:

Particulars Amount ( in Rs. )
Raw Material XXX
WIP XXX
Finished Goods XXX
Stock in trade XXX
Total XXX

(*) – Need to be given if detailed break is not provided in Notes / Schedules

III. Construction Contract

a. The total amount of Contract revenue recognized during the year is provided in attached Financial Statements / Rs. ___________

b. The assessee has used the proportion that contract costs incurred for work performed bears to estimated total contract costs / surveys of work performed / completion of a physical proportion of the contract work done to determine the stage of completion of contracts in progress

c. Disclosure for contract work in progress

i. The total amount of contract cost incurred upto 31st March 2017 is Rs. ____________

ii. The total amount of profits recognized upto 31st March 2017 is Rs. ____________

iii. The total amount of advance received as on 31st March 2017 is Rs. ____________

iv. The total amount of retention as on 31st March 2017 is Rs. ____________

IV. Revenue Recognition

a. Amount of Rs. _________ is not recognized as revenue during FY 2016-17 as the work has been suspended due to legal hurdles (or any other nature of uncertainty) and there is lack of reasonable certainty of its ultimate collection.

b. The total amount of revenue from service transactions is recognized during the year is provided in attached Financial Statements / Rs. _____________.

c. The assessee has used the proportion that “costs incurred for service provided bears to estimated total costs / surveys of work performed / completion of a physical proportion of the contract work done to determine the stage of completion of service transaction in progress

d. Disclosure for service transaction in progress

i. The total amount of cost incurred upto 31st March 2017 is Rs. _____________

ii. The total amount of profits recognized upto 31st March 2017 is Rs. ____________

iii.The total amount of advance received as on 31st March 2017 is Rs. ____________

iv.The total amount of retention as on 31st March 2017 is Rs. _____________

V. Tangible Fixed Assets

Disclosures as per ICDS V have been made against Clause No. 18 of Form 3CD

VI. Forex

No disclosure required under ICDS

VII. Government Grants

a. Government Grant (explain nature) of Rs. ________________ has been received, which is reduced from the value of fixed asset / recognized as income during PY / accounted as part of reserves and surplus and offered to tax.

b. Government Grant of Rs. ________________ has been received, which is not reduced from the value of fixed asset / not recognized as income during PY as the conditions mentioned therein may not be satisfied. [or explain any other reason]

VIII. Securities

No disclosure required under ICDS

IX. Borrowing Cost

a. Borrowing costs that are attributable to the acquisition or construction of a Qualifying asset (as defined in ICDS IX) are capitalized as a part of cost of such asset till such time as the asset is first put to use / when substantially all the activities necessary to prepare such inventory for its intended sale are complete. All other borrowing costs are charged to Statement of Profit or Loss.

“Qualifying Asset” means:

√ Land, Building, Machinery, Plant or Furniture, being tangible assets.,

√ Know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature, being intangible assets.

√ Inventories that require a period of 12 months or more to bring them to a saleable condition

b. The total amount of borrowing cost capitalized during the year is

Particulars For the year ended
31st March, 2017 (Rs.)
• As  Fixed   Assets / Intangible assets / Capital WIP XXX
• As Inventory XXX
XXX

X. Provisions and contingent liabilities

a. Details in respect of each class of provisions, are given as below:

(amount in Rs.)

Description
of the
nature of
obligation
As at 1
April, 2016
Additions Utilizations Reversal
(withdrawal
as no
longer
required)
Expected
Reimbursement
(asset
recognized for
that expected
reimbursement)
As at 31
March, 2017
1. Xxx Xxx Xxx Xxx Xxx Xxx
2.
Total Xxx Xxx Xxx Xxx Xxx Xxx

b. Details in respect of each class of asset, are given as below:

(amount in Rs.)

Description of
the nature of
Asset & Related
Income
As at 1 April, 2016 Additions Reversal
(withdrawal as
no longer
required)
As at 31 March, 2017
Xxx Xxx Xxx Xxx
Total Xxx Xxx Xxx Xxx

XI. General Notes

If a particular Income Computation and Disclosure standard is not applicable then the disclosure box in Form 3CD to be stated as – Not  Applicable

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Tags : form 3cd (86) ICDS (65) section 44AB (130) Tax Audit (260) tax auditor (86)

5 responses to “ICDS Master Disclosures – Clause 13 (f) of Form 3CD”

  1. JIGNESH SHAH says:

    REALLY VERY USEFUL

  2. CA Gopal Shah says:

    Thanks Shreyanse , be like this always, All the Best

  3. Dhebek M N says:

    Really useful information.Thank you…..

  4. DISHANK VORA says:

    Are reporting under clause 13(f) are mandatory? If not done, then what are consequences for assessee and tax auditor?

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