Defination of Turnover

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shankar banerjee (Querist)
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14 June 2010 What is the actual definition of turnover under Income Tax to ascertain the amount of Rs.40 lacs for compulsory Tax Audit

Whether the sale in forward transaction will be considered in determining the limit of Rs.40 lacs where the client neither makes any purchase nor effects any sales physically and only the difference is collected from the stock brokers

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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14 June 2010 In the "Guidance Note on Terms used in Financial Statements" published by ICAI, the expression Sales Turnover has been defined as:- The aggregate amount for which sales are effected or services rendered by an enterprises. The term gross turnover/sales and net turnover/sales are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts.

In the statement issued by ICAI on the companies (Auditors' Report) Order 2003 the word 'turnover' has been defined as under:-
The term turnover for the purposes of this clause may be interpreted to mean the aggregate amount for which sales are effected or services rendered by an enterprises.

The above definition can be adopted for tax audit purpose also.

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