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Assessment - Notice of AO

Chintan Shah (-) (534 Points)

05 March 2010

Dear friends,

There is another company client to whom notice u/s 142(1) is received.

Following details are called for by AO:

1. Working of Interest u/s 201(1A)

2. Opening / closing stock quantity, value and the working of rates of the stock.

3. Details of Reserves and surplus and the purpose of the same.

4. Proof of 15G / 15H collected from depositors and proof submitted with concerned CIT office for verification.

Please do tell me what is the purpose for which the AO has called these details? I mean what sort of additions the AO can make from these details?

Thx in advance........

Regards

Chintan

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3 Replies

Tarun (CA Practice ) (166 Points)
Replied 05 March 2010

Hi Chintan,

The details asked for are normally called during the initiation of assessment proceedings i.e under the cover of Notice u/s 143(1). Generally the notice to initiate assessment proceedings is accompanied by notice u/s 142(1) to call for records.

The assessment is usually done in line with previous assessment completed for past assessment years.

1. Working of Interest u/s 201(1A)

With these details the AO will scrutnise the correctness of the calculation.

For all TDS short payments/ deducted and not deposited an interest of 1% pm shall be levied.

2. Opening / closing stock quantity, value and the working of rates of the stock.

With the above said details the AO will scrutnise for under valuation of closing stock.

3. Details of Reserves and surplus and the purpose of the same.

The AO will ask for nature of reserves.

4. Proof of 15G / 15H collected from depositors and proof submitted with concerned CIT office for verification.

The above mentioned forms are submitted as a declaration claiming the receipt of dividend without the payment of tax.

The AO will scrutinize the investments shown as per the return in line with those as stated in declaration.

It seems that the same details are being asked for in the past assessment proceedings too. Before proceeding any further it would be better to first check the records of past assessment proceedings.

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shushantsinghal (BCOM(HONS),C.A) (283 Points)
Replied 05 March 2010

hii

1. the officer want to know how u have calculate the interest on delayed payament of TDS & treatment of same interest in the books of accounts.....i.e whether u added the interest whilw coputation of income or not....

2. how u had value ur closing stock because income tax allowed only fifo basis valuation..this mean that u might not understated ur closing stock or overstated ur opening stock...

3. any reserve created by company whichj is not allowed as per income tax & same shall be added by officer....

4. purpose of 15G & 15H R FOR THOSE WHO DOES NOT WANT TO DEDUCT THEIR THEIR TDS ON INCOME AS THERE INCOME R NOT EXCEEDING THE BASIC EXEMPTION LIMIT OF INCOME TAX.......SO U NEED TO GIVE THE DETAILS OF SAME FORM & WHY U HAD NOT DEDUCT TDS IN THEIR INCOME.....IF NO PROOF GIVEN THE SAME EXPENSES SHALL BE DISSALLOWED