28 December 2019
We are register under association for maintenance of office building. Our Nature is “the expenses incurred during the month will reimbursement from the entire unit holder as per there office area and Same nature are following in case of Electric Consumption and both the reimbursement exp charge with GST invoice and credited separately in Profit and loss account as Maintenance charges and Electricity charges.
So in the Last financial year we have issue Maintenance invoice of Rs. 55 Lakh and Electric Bill of Rs. 75 Lakh. And we have filed the income tax without doing Audit under section 44AB as the income is reimbursement nature.
Base on the return we have received u/s 139 (9) that this account must be audited under section 44AB.
My question is
1. As per our nature of work this reimbursement of income should be considered under turnover definition of income tax for the purpose of Tax audit under 44AB? if yes/no please share the relevant definition .
Amount of commission earned by the agent and not the aggregate amount for which sales are effected or services are rendered.
If the property in the goods or all significant risks and rewards of ownership of goods continue to belong to the principal, the relevant sale price shall not form part of the sales/turnover of the commission agent and/or the consignee as the case may be. If, however, the property in the goods, significant risks and reward of ownership belongs to the commission agent and/or the consignee, as the case may be, the sale price received/receivable by him shall form part of his sales/turnover
GROSS RECEIPTS
Gross Receipts would 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.
Inclusions (To be included):
1. Sale proceeds of scrap, wastage etc. if it is included in sale or turnover
2. Advance received and forfeited from customers
3. Cash assistance under the scheme of Government
4. Liquidated damages
5. Duty Drawbacks
6. Export incentives
7. Insurance claim(except relating to fixed assets)
8. Profit on sale of import license
9. Foreign exchange fluctuations on export sales
10. Interest income (if it forms part of business income)
11. Dividend income (in case of dealer of shares and securities)
12. Commission, brokerage, service and other incidental charges received in the business of chit funds
13. Reimbursement of expenses incurred (if credited to separate account then only to the extent of surplus)
14. Hire charges and instalments received
15. Finance income in case of lessor
16. Gross receipts including lease rent in the business of operating lease
17. Hire charges of cold storage
Exclusions (Not to be included):
1. Sale proceeds of asset held as investment.
2. Interest income (if not included as business income)
3. Dividend income except in case of dealer in shares
4. Reimbursements of custom duty and other charges collected by clearing agent
5. Share of profit of a partner of a firm/LLP excluded from total income u/s10(2A)
6. Liabilities/ provisions of creditors, expenses or taxes written back
7. Rental income (if not included as business income)
8. Reimbursement of advertising charges by an advertising agent from the client
Gross Receipts in case of Profession
Gross receipts in case of profession would include all receipts arising from carrying on of the profession.
Re-imbursement of expenses if collected separately either in advance or otherwise, should not form part of the “gross receipts”. If, however, such out of pocket expenses are not specifically collected but are included / collected by way of a consolidated fee, the whole of the amount so collected shall form part of gross receipts.
CAclubindia
