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I.T. Scrutiny

Aditya Shah (Chartered Accountant) (17 Points)

12 August 2010

A case where assessee is governed by the provision of sec.44ab and gets his books audited. The closing stock has been valued at cost and as certified by the management.During the course of assessment the a.o. asks for quantitative details of stock. The assessee is unable to submit the same as the same has not been maintained. It has also been mentioned in the audit report that "considering the nature of business it is not possible to maintain stock records." What is the remedy to the assessee and is there any damage which the a.o. can do for non submission of quantitative details of stock???

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4 Replies

Bhavin Bhadra (Job) (174 Points)
Replied 12 August 2010

You should reply to the I T officer in detail what is the nature of goods and how it is not possible to maintain the QTY records of the same.

if you dont responde then i think he can damage under various section of assessment of IT.

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ajithasai (m.ajitha) (95 Points)
Replied 13 August 2010

The closing stock has been valued at cost and as certified by the management.

regards,

phe9oxis,

CA SURENDRA KUMAR RAKHECHA (Practising CA at Surat) (26263 Points)
Replied 13 August 2010

I appreciat ethe views of Bhavin Bhadra.

Accepting his views; I further add :

If the business is of retail nature consisting various items ; then you can just give the closing inventory as on 31 03 2010 which is generally taken by the businessmen at the year end.

If not; prepare a sheet and get it signed with the person who prepares it and then approve it with the proprietor.

If the Gross Profit Ratio is in line with the previous years; then you may not find any trouble at the time of assessment.

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(Guest)

Hai..............

Good morning............

Welcome to this forum.....

A case where assessee is governed by the provision of sec.44ab and gets his books audited. The closing stock has been valued at cost and as certified by the management.During the course of assessment the a.o. asks for quantitative details of stock. The assessee is unable to submit the same as the same has not been maintained. It has also been mentioned in the audit report that "considering the nature of business it is not possible to maintain stock records." What is the remedy to the assessee and is there any damage which the a.o. can do for non submission of quantitative details of stock???

Have a nice day......

Thank you for sharing with us.....

regards ,

phe9oxis.