Pradip Shaw & Co (Practice) (227 Points)
25 August 2011A sub dealer of honda Motor byke, total commission earning during 2010-11 Rs. 950000
Total sale 180 byke *50000 =9000000/-, ismaintaining books of account & Tax Audit are mandatory ??
My question is sale would be treated as Subdealers sale or that sale is reflected in orginal companys books of accounts,
becuse subdealer not at all buy any goods from the orginal company ?
please clarify
Priyanka
(Chartered accountant)
(371 Points)
Replied 25 August 2011
sub dealer not at all buys goods from dealer or comapny. he is merely acting as a agent / middelmen and he is earning commission that. sale of bikes is the sale of company not of sub dealers business. his business is earing commission which is 950000. he is nt liable to audit at all. this commision would be his gross receipts and you can find his profits from business after deducting all expenses or can directly pay tax @ 8% us 44AD.
Pradip Shaw & Co
(Practice)
(227 Points)
Replied 26 August 2011
If tax paid considering < 8% profit then whether Tax Audit is compulssory ?
R SUBRAMANIAN
(NA)
(56 Points)
Replied 26 August 2011
Relevant text in the matter is quoted - "A question may also arise as to whether the sales by a commission
agent or by a person on consignment basis forms part of the turnover of the commission agent and/or consignee as the case may be. In such cases, it will be necessary to find out, whether the property in the goods or all significant risks, reward of ownership of goods belongs to the commission agent or the consignee immediately before the transfer by him to third person. 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. In this context, it would be useful to refer to the CBDT Circular No.452 dated 17th March, 1986, where the Board has clarified the question of applicability of section 44AB in the cases of Commission Agents, Arhatias, etc."
Thus the above aspect needs to be considered.
Pradip Shaw & Co
(Practice)
(227 Points)
Replied 28 August 2011
Thanks Priya & Subramanian
Here the client is a advertisement agent, and the orginal party had paid entire addvertisement bill +comm of agent to the agent, and agent paid to the media.
But agent showing only comm income in its books of acccounts not the entire receipt & payments, if it had shown entire amount then turnover > 60 lacs, but only comm then it <10 lacs.
whether the treatment by the comm agent is right, please suggest
please check 26AS of that commission agent there you will get gross commission received and tds.....
if the money received by agent regarding adv. bill, suppose lost, then this loss will be bear by advertisement company bcos you client is mere agent of that adv co.
so gross commission recd by agent should only be taken into consideration.
silky
(student)
(31 Points)
Replied 07 October 2011
if in the very first ques of honda motor bike if the commision exceed 10lac then??how will it be treated whether it is commision income or business income acc to sec 44AB
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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