29 August 2012
Sir, one of my client has his proprietorship firm and he is covered under tax audit. Now he is also doing share business in his name(Not in the name of his Firm) and turnover from that business is 30 lacs.
Now while preparing tax audit report of his firm,whether we have to add turnover of share business? whether we have to audit accounts for share business also?
29 August 2012
No we can,t add the proceeds of other business, have to go with the business wise. There is no definition of Gross Proceeds in the Act but as per the guide lines issued by the ICAI Gross Proceeds or Receipts The aggregate amount for which sales are effected or services rendered by an enterprise. The term `gross turnover’ and `net turnover’ (or `gross sales’ and `net sales’) are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts”.
29 August 2012
Since you are doing the TAX AUDIT of proprietory business, conduct the audit of the BUSINESS. The shares transactions are considered separately. As per ICAI guide lines, in case of proprietory business, you need to take into account the income from all the sources.
29 August 2012
Not really; as you showing the share transactions as personal transactions. To be considered for computation purpose.(On the other hand, if you want to show the share transaction as separate BUSINESS, then the turn over is required to be considered)You need to take the CALL.
CAclubindia
