Limited scrutiny
This query is : Resolved
10 December 2016
Hi all,
Please anyone explain me what reply the Income tax Department is expecting when it sends Limited scrutiny letter stating-
1. SALES TURNOVER MISMATCH( What I am thinking is reconciliation between ITR and ST-3/VAT Returns,etc)
2. EXPENDITURE OF PERSONAL NATURE (what kind of documents should be submitted to AO, like 3CD(however 3CD is an Internal document))
3.TAX CREDIT MISMATCH (with what should I cross check to know that they are mismatched.)
4.MINIMUM ALTERNATE TAX LIABILITY( with what should I cross check to know that they are mismatched).
5.CONTRACTS RECEIPTS/FEES MISMATCH(with what should I cross check to know that they are mismatched)
6.SHORT TERM CAPITAL GAINS u/s 111A.
7.SECURITIES TRANSACTIONS
Thanks In ADVANCE.
Please anyone explain me what reply the Income tax Department is expecting when it sends Limited scrutiny letter stating-
1. SALES TURNOVER MISMATCH( What I am thinking is reconciliation between ITR and ST-3/VAT Returns,etc)
2. EXPENDITURE OF PERSONAL NATURE (what kind of documents should be submitted to AO, like 3CD(however 3CD is an Internal document))
3.TAX CREDIT MISMATCH (with what should I cross check to know that they are mismatched.)
4.MINIMUM ALTERNATE TAX LIABILITY( with what should I cross check to know that they are mismatched).
5.CONTRACTS RECEIPTS/FEES MISMATCH(with what should I cross check to know that they are mismatched)
6.SHORT TERM CAPITAL GAINS u/s 111A.
7.SECURITIES TRANSACTIONS
Thanks In ADVANCE.
10 December 2016
Do not submit any statement based on your assumptions, visit AO and ask for detailed point of scrutiny. Please also not my specific comment against each of the point :-
1. SALES TURNOVER MISMATCH( What I am thinking is reconciliation between ITR and
ST-3/VAT Returns,etc) - Prepare reconciliation and keep it ready with you.
2. EXPENDITURE OF PERSONAL NATURE (what kind of documents should be
submitted to AO, like 3CD(however 3CD is an Internal document)) -- unless you know which expenditure the AO has objection you can not do anything
3.TAX CREDIT MISMATCH (with what should I cross check to know that they are
mismatched.)-- collect TDS certificates and reconcile the amount claim by you and also with 26AS
4.MINIMUM ALTERNATE TAX LIABILITY( with what should I cross check to know that
they are mismatched)- It seem that you are a Company -- Prepare a statement of Book Profit and check whether tax paid is less than 18.5% of the book profit
5.CONTRACTS RECEIPTS/FEES MISMATCH(with what should I cross check to know
that they are mismatched)-- check with TDS certificates
6.SHORT TERM CAPITAL GAINS u/s 111A.--- is there any sale of asset ? Ask AO for detail
7.SECURITIES TRANSACTIONS -- This point and point 6 seems to be related, it looks that the Profit from sale/purchase of shares is claimed by you as Income from business, you have to justify the same.
1. SALES TURNOVER MISMATCH( What I am thinking is reconciliation between ITR and
ST-3/VAT Returns,etc) - Prepare reconciliation and keep it ready with you.
2. EXPENDITURE OF PERSONAL NATURE (what kind of documents should be
submitted to AO, like 3CD(however 3CD is an Internal document)) -- unless you know which expenditure the AO has objection you can not do anything
3.TAX CREDIT MISMATCH (with what should I cross check to know that they are
mismatched.)-- collect TDS certificates and reconcile the amount claim by you and also with 26AS
4.MINIMUM ALTERNATE TAX LIABILITY( with what should I cross check to know that
they are mismatched)- It seem that you are a Company -- Prepare a statement of Book Profit and check whether tax paid is less than 18.5% of the book profit
5.CONTRACTS RECEIPTS/FEES MISMATCH(with what should I cross check to know
that they are mismatched)-- check with TDS certificates
6.SHORT TERM CAPITAL GAINS u/s 111A.--- is there any sale of asset ? Ask AO for detail
7.SECURITIES TRANSACTIONS -- This point and point 6 seems to be related, it looks that the Profit from sale/purchase of shares is claimed by you as Income from business, you have to justify the same.
12 December 2016
Dear Harita...
By issuing limited scrutiny notice, Income tax department insist to get your clarification on some specific points that are mentioned in such notice. But remember if department found any suspicious transaction than they can divert from limited to detailed scrutiny. Don't submit any documents/clarification based on your own assumption unless demanded by Income tax department.
By issuing limited scrutiny notice, Income tax department insist to get your clarification on some specific points that are mentioned in such notice. But remember if department found any suspicious transaction than they can divert from limited to detailed scrutiny. Don't submit any documents/clarification based on your own assumption unless demanded by Income tax department.
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