Stamp paper vendor
Querist : Anonymous
Treasury has issued certificate of commission accrued from selling of stamp papers and which is about 247000/-
while filing itr 4 I should mention Rs. 247000/- as his gross receipts
or
I should mention the whole value of stamp papers sold by him as gross receipts.
Guest
Querist : Anonymous
Citation :- Kerala State Stamp Vendors ... vs. Office Of The Accountant General ... (2006) 282 ITR 7 (Ker)
Querist : Anonymous
Querist : Anonymous
Querist : Anonymous
Querist : Anonymous
* The vendor sells stamp papers worth Rs. 70 lakhs.
* The vendor's **commission (discount)** is Rs. 2,47,000.
* After deducting business expenses from this commission, the **net profit** falls below the exemption limit.
### Key points under Income Tax Act:
* **Section 44AD(5)** mandates audit if turnover exceeds Rs. 2 crore (limit revised from Rs. 1 crore).
* Here, the turnover (sales value of stamp papers) is Rs. 70 lakhs, which is **below Rs. 2 crore**.
* However, the business income for audit is generally considered as **gross receipts or turnover** — not just net profit.
Since the **total sales of stamp paper (turnover)** is Rs. 70 lakhs (less than Rs. 2 crore threshold), **audit under section 44AD(5) is not mandatory** based on turnover.
---
### But what about commission/profit below exemption limit?
* If net profit is below exemption limit (usually Rs. 2.5 lakh for individuals), the person may not have taxable income.
* Even then, if the turnover is below threshold, audit is not compulsory.
* But if the vendor opts for regular income computation or is under any other section, audit rules may differ.
---
### Summary:
* **Audit under Section 44AD(5) depends on turnover (gross receipts), not profit.**
* Here, with Rs. 70 lakhs turnover (below Rs. 2 crore), **audit is not mandatory even if net profit is below exemption.**
---
If you want, I can help clarify further or check for other audit applicability (like under Section 44AB for other criteria).
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