22 January 2016
There is business of CHA. He pays some charges like freight, concor charges, CFS charges on behalf of importer. which is reimbursed later on.
So my question is that whether such expense should be included in calculation of Turnover.
If not than is there any circular or notification issued by Income tax department for the matter ?
23 January 2016
As per Guidance Note on Tax Audit U/s 44AB issued by the ICAI for the purpose of deciding gross receipts of the business it has been mentioned that Gross Receipts will include only excess arising out of the reimbursement amounts. Please refer the same. The relevant text is reproduced below- "5.16The term "gross receipts" is also not defined in the Act. It will include all receipts whether in cash or in kind arising from carrying on of the business which will normally be assessable as business income under the Act. Broadly speaking, the following items of income and/or receipts would be covered by the term "gross receipts in business": . . .
(v) Reimbursement of expenses incurred (e.g. packing, forwarding, freight, insurance, travelling etc.) and if the same is credited to a separate account in the books, only the net surplus on this account should be added to the turnover for the purposes of Section 44AB;
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