Tax audit under 44ab

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Rohit Prajapati (Querist)
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29 August 2016 Dear Sir,
An assessee is engaged as a Commission Agents of selling Garlic. Will this be considered as business or profession ? How will Tax Audit be applicable to this assessee. Also, will this assessee be required to charge Service tax or not ?

ACA Anurag

ACA Anurag (Expert)
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30 August 2016 Dear Rohit, It would be treated as business income and tax audit would be applicable if limit has been crossed. Turnover will be calculated as total amount on which commision has recieved. Service tax is also applicable but only if commision income has increased 9 laks (Registration is required) and if it increased 10 laks service tax payment is required Hope your query is resolved Kindly like if my response has helped you

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Rohit Prajapati

Rohit Prajapati (Querist)
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30 August 2016 Dear Anurag Sir, Thanks for your response !!
Turnover will be Actual Sales or Actual Commission received ? What if the person does not show Sales in his Books of Accounts ? As it is a business income, turnover limit will be Rs.1 Crore, Right ? Also, it would be nice if you can provide any section in which i can get the answer i am looking for.
Thanks, Rohit

ACA Anurag

ACA Anurag (Expert)
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30 August 2016 Dear Rohit, Generally it would be actual sales for income tax purposes and u can refer section 44AB for more clarity else u can go for 44AD for deemed provison if turnover is less Hope your query is resolved

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Rohit Prajapati

Rohit Prajapati (Querist)
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30 August 2016 Dear Anurag Sir, The proprietor is not maintaining sales records in his books of accounts. Also, he is not paying service tax. and his books of accounts are audited as per condition of Gross Receipts of Rs.25 Lakhs.
According to me, his books should be applied the condition of turnover of Rs.1 crore. Also, he should be liable for service tax, acc' to me. I also think that the turnover for this kind of business should be Actual Commission received ?
Kindly let me know that my view is correct or not ?
Thanks, Rohit.

ACA Anurag

ACA Anurag (Expert)
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30 August 2016 Dear Rohit, If sales has increased 1 crore than he is liable for Audit and in case of non audit penalty of Rs 150000 can be imposed. If commision income is 10 laks then service tax is also applicable but u need to check RCM mechanisms for that so that whether it is covered there or not. Hope your query is resolved

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Rohit Prajapati

Rohit Prajapati (Querist)
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30 August 2016 Dear Anurag Sir, I got it about Service Tax. But still i have doubt regarding Tax Audit. If there is no way of knowing the Actual Sales, than in such case what should be done ?
Thanks, Rohit.

ACA Anurag

ACA Anurag (Expert)
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31 August 2016 Dear Rohit, How its not possible as whenever a sales has done then only Commmison get credited Hope your query is resolved Kindly like if my response has helped you

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Rohit Prajapati

Rohit Prajapati (Querist)
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01 September 2016 Yes, got it. Thanks for your response !!!!!!!

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