Tax Audit
This query is : Resolved
03 September 2010
if a person (Say X) is running a branch of a company (Say Levis)
1. as per Agreement Company will provide stock, and billing is done on Online basis.
2. as per agreement its Consignment Sale
3. Mr.X is registed in Sale Tax Dept.
4. Mr.X only receive Commission on sale and interest on deposit.
5. Now if sale Exceed 40 (or 60)Lakh..
is Mr.X is liable to Tax Audit.
it may be noted that.
1.It is consignment Sale as per Agreement and Mr.X is Selling as per Sale Tax
2. But There in no Purchase as such. nor even Closing Stock
Do Reply with provisions
1. as per Agreement Company will provide stock, and billing is done on Online basis.
2. as per agreement its Consignment Sale
3. Mr.X is registed in Sale Tax Dept.
4. Mr.X only receive Commission on sale and interest on deposit.
5. Now if sale Exceed 40 (or 60)Lakh..
is Mr.X is liable to Tax Audit.
it may be noted that.
1.It is consignment Sale as per Agreement and Mr.X is Selling as per Sale Tax
2. But There in no Purchase as such. nor even Closing Stock
Do Reply with provisions
Ravi Shankar
(Expert)
04 September 2010
In my opinion, Mr X is not required to get his books of account audited u/s 44-AB as the sales are actually captured in the books of the Principal.
Mr. X is registered with the Sales Tax Department since that Act includes an agent also in the definition of a 'dealer'. i.e., the agent here complies with the sales tax law as an agent of his principal.
Further, as the invoices are raised online (I presume that the portal where the agent registers the sales belongs to the principal, as you query is silent in that regard), you have a strong case in your favour!
The agent can merely show his commission based on the TDS certificate from the principal and file his IT return.
Mr. X is registered with the Sales Tax Department since that Act includes an agent also in the definition of a 'dealer'. i.e., the agent here complies with the sales tax law as an agent of his principal.
Further, as the invoices are raised online (I presume that the portal where the agent registers the sales belongs to the principal, as you query is silent in that regard), you have a strong case in your favour!
The agent can merely show his commission based on the TDS certificate from the principal and file his IT return.
Maninder Jain
(Expert)
11 September 2010
Under the sales of goods Act, the sales done by consignee on behalf of consigner is considered as sales of Consigned.
So the Tax audit on consignee is not applicable UNLESS his commision income exceeds 40(or 60) lacs
So the Tax audit on consignee is not applicable UNLESS his commision income exceeds 40(or 60) lacs
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