In AY 11-12 M/s XYZ has a turnover of Rs. 45 Lakhs and purchases are Rs. 85 lakhs. Whether Tax Audit is applicable?
Regards,
Devendra K
23 Replies
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 07 September 2011
Refer Sec 44AB it uses d words GROSS TURNOVER or GROSS RECIEPTS and doesnt speak abt purchases.
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 07 September 2011
IT IS STRICTLY APPLICABLE ON THE AMOUNT OF TURNOVER(SALE). NOT ON PURCHASE
RAKESH
(Almost CA)
(2199 Points)
Replied 07 September 2011
in ur case. TAX audit is not applicable. see only sales when looking for the turnover.
Sanket
(!..Live to Give..!)
(16427 Points)
Replied 07 September 2011
Tax Audit is not Applicable in this Case.......
Deepak T Shetty
(Chartered Accountant)
(121 Points)
Replied 08 September 2011
Not applicabe at all ! Agree with all !
Shah Tarun
(Student)
(800 Points)
Replied 08 September 2011
Audit us 44AB is not applicable as per section,however I have personally noticed that many CA's provide report us 44AB considering higher purchase for safe side of assesse. . .
Amit joshi
(Article Assistant)
(24 Points)
Replied 08 September 2011
not applicable us 44AB but applicable if new profit shows less than 8% of total turnover.
Mukesh Kumar Singh
(CA-FINAL)
(4094 Points)
Replied 08 September 2011
IT IS STRICTLY APPLICABLE ON THE AMOUNT OF TURNOVER(SALE). NOT ON PURCHASE
viral sheth
(CA)
(57 Points)
Replied 08 September 2011
this is a very interesting question. i beg to differ with everyone above
turnover includes sales and all taxable purchase
the definition gross turnover u/s 2(23) is in two fold aspect:
Clause (i) covers Gross turnover for the purposes of levy of sales tax which is the entire amount of sales during the year. Clause (ii) covers Gross turnover for the purposes of levy of purchase tax which will include all purchases during the year. Now a question may arise what would constitute Gross Turnover for the purpose of ascertaining liability for audit.
Purchase tax is payable only in respect of certain purchase under section 12. The act, unlike in the case of Sales turnover, does not provide any deductions from Gross Turnover of purchase to arrive at taxable purchases.
It is therefore logical to conclude that the expression all purchases of goods means all purchases of goods on which purchase tax is leviable. Going by this interpretation of this term, Gross turnover for the purposes of Section 62 would be an aggregate of turnovers of all Sales and of Taxable Purchases.
CA. Anubhav Jaggi
(CA)
(104 Points)
Replied 08 September 2011
For AY 2011-12, tax audit u/s 44AB is applicable for turnover exceeding Rs.60 Lacs, not Rs.40 Lacs.
So, tax audit is not applicable in this case.
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