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Principal item as in Form 3CD for 44AB

dinesh (student) (51 Points)

03 October 2007

hello friends,

this is Dinesh from Trichy. I have a doubt in Form 3CD. It requires the principal item of the business to be filled. To me, What is the Principal item?.. In my case, I have a client dealing with Medicines wholesale dealing.. What will be his principal item of Business?...Please also give some more examples...Its very urgent..

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10 Replies

(Guest)

i want to form no.3cd

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Bhuvnesh (Chartered Accountant) (101 Points)
Replied 04 October 2007

Items which constitute 10% or more of total value of purchases, consumption or stock are classified as Principal Items.

dinesh (student) (51 Points)
Replied 04 October 2007

dear bhuvnesh
thanks for your reply..but where is it stated?...can you refer any book?.. i hv another in your reply..u said 10% of total purchases,consumption or stock..remember one thing may be more than 10 % in purchases but may not be in stock...and another may be 10% in stock but may not be same in purchases..then how can it be identified..

(Guest)

send me your mail id i send u the form

abid (accountant) (169 Points)
Replied 04 October 2007

hi, Bhuvnesh has said 10% of purchase ,consumption or stock.ya it is possibke that one thing may be in purchase but may not be in stock but Is that possible whether one item is in stock may not be in purchase?it is not possible. OK. so 10% of purchase whether it is not in stock will be taken as principle item.

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Bhuvnesh (Chartered Accountant) (101 Points)
Replied 05 October 2007

Hope its clarified now. Moreover item which is more than 10% of the aggregate under the relevant head will represent a principal item for that very particular head only. So if the aggregate of Stock of Generators represent 10% or more of the total stocks that will be taken as a principal item for Closing Stock and not for purchases if the 10% criteria is not satisfied.

dinesh (student) (51 Points)
Replied 05 October 2007

hey..thanks for your replies. but i have one more connected with it. while submitting the return form till last year, we shall submit an annexure along with the audit report if there is no prinicipal item. But from this AY, in ITR, there is no way to annex. so in case of no prinicipal item, is it enough to just state it as nil or else how can we do it?