tax audit applicability

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Querist : Anonymous

Querist : Anonymous (Querist)

24 September 2010 if my purchases exceeds 40 lakhs for the financial year 2009 2010 is it liablle for tax audit though my sales is olnly 38 lakhs for the year

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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24 September 2010 No not liable to Tax Audit.
In the "Guidance Note on Terms used in Financial Statements" published by ICAI, "the expression "Sales Turnover" has been defined as : "The aggregate amount for which sales are effected or services rendered by an enterprises. The term 'gross turnover/sales' and 'net turnover/sales' are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts"

In the statement issued by ICAI on the companies (Auditors' Report) Order 2003 the word 'turnover' has been defined as under-
"The term 'turnover' for the purposes of this clause may be interpreted to mean the aggregate amount for which sales are effected or services rendered by an enterprises"

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