Tax Audit Section 140 A Observations

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02 September 2010 What are the important document to be verified for 140A complicance as Tax Auditor.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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02 September 2010 Please note following:

01. If the assessee is for first time under tax audit, then take the certification for opening balances.
02. In all other cases check the opening balance from last tax audited balance sheet
03. Start with purchases register audit, check the all the bills of purchases. Make the note for any Discrepancies & discuss this with the asseessee & give the appropriate treatment for the same.
04. Finish the sales register, verify the sales with excise returns (if any) or vat returns or service tax returns.
05. Bank account audit with Chq. books & deposit slips. Confirm the bank balance with balance certificate from bank. Check the BRS.
06. Cash account audit. Check for payments exceeding 20000 for disallowances unser rule 6DD.
07. Check the journal register from available supportings.
08. Confirm the debtors & creditors balance from the account extract from debtors & creditros. If not available then take the certification from assessee.
09. If it is partnership firm then provide for partners salary & interest on capital as per partnership deed.
10. Check for all statutory dues paid after year end for disallowances prupose.
11. Check the TDS calculations. Make a note for short deduction of TDS for tax audit report purpose.
12. Check the other law compliances if any. If the same is not complied then check the disallowances of expenses under income tax act.
13. Check the valuation of closing stock & method applied for that, same should be certified by the assessee.
14. Check the depreciation calculations.
15. Make the provisions for expenses.
15. Start generating the information for tax audit report like information u/s 269CC & 269T, payments to relatives u/s 40(a)(2b), disallowances of expenses u/s 43B, Method of accounting.
16. Any other point which you feel is necessary to audit.

Experts please make comment on the same, if any thing I forgot.

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