Tax audit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 April 2012 While conducting audit of this year we have found that during Year 2010-11, company has earned total receipts of Rs. 63 Lacs (commission Rs. 58 Lacs and interest on deposits with steel authority of india Rs 5 Lacs). and also that the company has obtained form 3CA & 3CD from CA.

We have to confirm whether the company was required for tax audit since its receipts was less than Rs. 60 lacs or Auditors has considered interest amount while calculating the limit of Rs. 60 Lacs.

If Auditor considered the interest income, whether he is correct to consider it or not.

If Tax Audit was not required, what are the consequences.

Plz reply

P.S : Company is a commission agent for leading steel companies.

CA CKP

CA CKP (Expert)
Follow

18 April 2012 Interest income has nexus with the commission income / business. So the stand taken by the CA is correct in considering the interest income while calculating turnover.

Message likes : 1 times

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

18 April 2012 The interest received on deposit from SAIL is
incidental to the Commission Business.
In absence of the deposit, Agency was not possible. The stand taken by the auditors are
very much correct looking to the magnitude and size of the business.
.
In case tax audit was not required but assessee files Tax Audit Report, there is no problem from department's side.
.
In case where audit was required but assessee fails to get his account audited penalty U/s 271B is leviable, which is 0.5% of turnover or 150000/- whichever is less.
.

Message likes : 1 times

CA Kishore Tallam

CA Kishore Tallam (Expert)
Follow

18 April 2012 Disagree with experts.

Interest income will not be included in gross receipts for consiering limit for tax audit.
Please refer guidance note on tax audit which says that interest income unless assessed as Business income (i.e. for finance companies), it shall not form part of gross receipts.
Hence, the stand of the auditor is not correct.
You are not required to undertake any tax audit for this year.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

VIJAY M DHANAK

RADHAKRISHNAN A R

venkateswara reddy

KANISHKA HISARIA

Chandrasekhar gadde

Subscribe Now

Tax audit

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA