Commission income

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CA Sanjay Baheti (Querist)

06 August 2012 In case of partnership Firm engaged in Trading ,Manufacturing & Job works related to Ferrous & Non-ferrous Metals, how to be considered the Commission Income i.e. whether Direct Income or Indirect Income with a view to compute GP/NP Ratio so far Tax audit is concerned under I.T.Act while reporting in Form 3CD.

Amol S Joglekar

Amol S Joglekar (Expert)

06 August 2012 You need to take the call as per the situation. The best practice is append your working to tax audit report.

CA Sanjay Baheti

CA Sanjay Baheti (Querist)

06 August 2012 Dear Amol ji

Thanks for reply. However I could not understand what you meant to say. Only reply in yes or no as to Direct Income or Indirect Income.

Amol S Joglekar

Amol S Joglekar (Expert)

06 August 2012 Since it is not the main course of business of the assessee, do not waste your valuable time in deciding whether it is direct or indirect, irregular or exceptional, extra ordinary or otherwise..... Think in the perspective of Assessing Officer...... write a note that you have considered the commission income as XXXXXXX and accordingly the ratio is worked out. Make it simple.

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