Tax Audit Applicability (Sales as per Books or ICDS)

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This discussion addresses the confusion surrounding tax audit applicability when sales figures differ between the company's books of accounts and Income Computation and Disclosure Standards (ICDS) working. The consensus, supported by CBDT clarifications, is that for tax audit applicability, the turnover should be considered as per the books of accounts maintained by the assessee. Adjustments made under ICDS are reported separately in Form 3CD.

CA Chandan Sharma

CA Chandan Sharma (Querist)

13 September 2022 Sales as per books of accounts maintained is Rs.95 Lacs, however revenue as per ICDS working is Rs.15 Crore.

I am confused which turnover should I consider for applicability of Tax Audit. If I choose sales as per books then tax audit is not applicable and if I choose ICDS working then Tax audit is applicable.

I have not come across any reference which says for tax audit applicability turnover should be considered as per ICDS working.

Please suggest which one to consider with any reference.

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 September 2022 In case of individual choose as per books of accounts.

CA Chandan Sharma

CA Chandan Sharma (Querist)

13 September 2022 Forgot to mentioned...It is a Private Limited Company

CA Chandan Sharma

CA Chandan Sharma (Querist)

13 September 2022 Forgot to mentioned...It is a Private Limited Company

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 September 2022 CBDT has clarified that the books of account are to be maintained in accordance with the accounting policies applicable to the assessee. Thus, it can be concluded that the reporting in Form 3CD shall be in accordance with the books of account maintained by the assessee. Any adjustment made to profit or loss under the ICDS shall be reported in Clause 13 of Form 3CD.
Consider turnover as per books of accounts

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