Tax Audit

This query is : Resolved

shaikh irshad (Querist)
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08 August 2010 Assessee is a proprietor of two business. one is manufacturing and other is trading.
manufacturing unit sells its finished product to trading unit and the trading unit sells it to the ultimate customers.

for the purpose of tax audit shall turnover of manufacturing unit will be added to the sale of trading unit?

The fact that manufacturing unit sold 100% to proprietors own trading unit will change the case for tax audit?

CA Punit

CA Punit (Expert)
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08 August 2010 if d trading unit also deals in items of other producers... it'll be considered as a separate business, & applicability of 44AB shall be then judged.
hwever if it is meant only for the assessee's products then it shall be considered as a single unit altogether.

Still wait for more replies....

mohinder kansal

mohinder kansal (Expert)
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08 August 2010 agreed with the reply.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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09 August 2010 Agreed... If the products are same or similar in nature, then both the turnover will be added for Tax audit purpose.

mohinder kansal

mohinder kansal (Expert)
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09 August 2010 When manufacturing prop. concern transfers/sells 100% product to its other own prop. concern, then turnover of trading concern shall be counted into account for tax audit purposes. goods trnasfered to trading concern by mfg. firm shall not be added to the turnover.

suppose mfg. firm transferred stock/goods of Rs. 50 lacs to prop. trading firm and trading firm sell further part of goods for Rs. 45 lacs, then turnover of assessee shall be taken as 45 lacs. if trading firm of the assessee also make sale of other products for Rs. 10 lacs, turnover shall be 55 lacs. if mfg firm of prop. make sale also to other parties whether of same product or other product(s) for Rs. 10 lacs, turnover of the assessee shall be taken as 65 lacs.

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