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The trustees must ascertain the legal status of their local
units: Any 'branch' that fulfils the requirements to
register as a separate charity (ie it is autonomous, has
income over ?1,000 or has a permanent endowment or the
exclusive use/occupation of land), must be separately
registered. As a separate charity, it would normally have
its own accounts and trustees' annual report (but see
uniting directions question). If the branch is not a
separate charity then its funds will be included with those
of the main charity as follows: Funds raised by a branch
for the general purposes of the main charity will be
accounted for as unrestricted funds. Funds raised by a
branch for specific purposes of the main charity (including
for use solely in the branch) will need to be accounted for
as restricted funds. This is a complex area.
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Treatment of Government grant and its utilization in P
Income Tax Department sends cheque for INR 2 Crore as Refund after completion of Assessment for A.Y.2011 - 2012 to a Company. As per IT Return filed for this year I.T. due to Government was INR 60 Lac but was assessed at INR 70 Lac. TDS due to Company was INR 3 Crore which was admitted as INR 2.7 Crore by Government. Government also adjusts Tax dues for A.Y. 2009 - 2010 of INR 40 Lac which was disputed earlier by the Company and Appeal was lying with the CIT. Government pays Interest to the Company amounting to INR 40 Lac. Provision for Income Tax made by the Company in its accounts for F.Y. 2010 - 2011 (A.Y. 2011 - 2012) was INR 50 Lac. What would be the Journal Entry at the time of receipt of Refund of INR 2 Crore from the Government in A.Y. 2014 - 2015 in the books of the Company?
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