06 April 2012
Dear Sir/Madam, !! URGENT Reply Required !! I just want to get an expert advise on following issue:- 1] If a person is carring business of Sell & Purchase Of Gold jwellery and Money lending on hypothecation of gold, then how his turnover is deceded for Audit purpose?
2] If Person is only carring bussiness of Lending Money on Hypothecation of gold then , when he will be eligible for Tax Audit?
As far as Turnover is required to be calculated in first case it will be the total of gold sold by the person because gold will be treated as stock in trade and income from hypothecation will be taken as indirect income in P&L account.
in case 2 the business being carried on will generate only interest income and this will be treated as Direct income and if Such gross receipts exceeds the maximum limit for Tax audit then Tax audit will be mandatorily applicable.
Thank you for clarification. But doubts are still there i.e. in 2nd case which receipts will be clubbed for turnover purpose i.e. Money given on gold leding or interest received by the money lender ?
13 May 2012
In 2nd case Interest on Gold loan will be taken as Turnover And money given on Gold lending will not be taken for such purposes because Turnover includes only receipts made by a person and gold lending is not any sort of Receipt.
CAclubindia
