Tax Audit

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Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2010 are we supposed to take average stock(avg+clo/2) in tax audit clause 32 for calculation of stock turnover ratio or only closing stock (of finished goods which is recommended by icai through guidance notes), if answer is closing stock ,is it specified anywhere i income tax act or rule ?

CA Navin Jain

CA Navin Jain (Expert)
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27 September 2010 on closing stock

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 September 2010 Page 137 Of "Issues on Tax Audit" an ICAI publication says ratio is to be calculated on closing stock value only.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 September 2010 Page 47 (volume 115,issue no.1)of "The tax Refencer" a weekly publication of Direct taxes says, there can be different interpretations as to the items involved like gross profit,turnover,stock-in-trade. Place a suitable note explaning the basis adopted.

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