Computation of turnover under sec.44ab for tax audit

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 November 2014 Assessee has doing business of Prepaid Mobile Recharge of certain company. He is doing mobile recharge through mobile by his customers. For this he get Commission. For the Year ending 31.03.2014 his mobile recharge business he done Rs.2,01,42,135/- and from company he receives amount Rs.2,07,96,442/-.
My question is he is not doing any buying and selling activities nor he is doing any contract works, can he undergo Tax Audit u/s 44AB of Income Tax Act,1961.
Please solve the my doubt.

Amol S Joglekar

Amol S Joglekar (Expert)

23 November 2014 There are 2 routes available with Mobile service providers.
01. Purchase scratch cards and sell the same.
02. Deposit the amount/purchase the talk time with/from Mobile service provider and transfer it to respective end users as per end users' scheme / requirements. In this case a monthly commission on the deposit/purchase amount is given by the Mobile service provider.
While in firt case, the amount of scratch cards sold shall be taken to compute the turnover, in the second case, the commission earned constitutes the turnover.

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