Turnover & Gross Receipts

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sanalkumar t m (Querist)

10 August 2010 What the Meaning of turnover? in Co Act And Income Tax

Whats the meaning Of Gross Receipts?

Will it include tax ?

CA Sanat Pyne

CA Sanat Pyne (Expert)

10 August 2010 In my opinion same should be included even if Assessee is have not included the same in Profit and Loss account and shown the same as current Liability.

Section 145A of the Income Tax Act,1961 states that purchase , sale and inventory shall be valued by taking into account the amount of any tax, duty, cess or fee . An extract of section 145A is as follows:

145A. Notwithstanding anything to the contrary contained in section 145,

(a) the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head Profits and gains of business or profession shall be

(i) in accordance with the method of accounting regularly employed by the assessee; and

(ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation.

Explanation.For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment.

Therefore , in my opinion , maintaining accounts of excise duty VAT separately is not correct in terms of section 145A of the I T Act. In that sense , for determining the meaning of the word “sales turnover” VAT or excise duty should also be considered for purpose determining the criteria for getting accounts audited u/s 44AB of the I T Act.

sanalkumar t m

sanalkumar t m (Querist)

10 August 2010 Pls kindly eloborate the Meaning "Right arising there from" Consequent to such payment?

should Refundable tax be included in valuation of inventry ?

will it be against AS 2 ?

CA Sanat Pyne

CA Sanat Pyne (Expert)

10 August 2010 refundable tax will not be includable in the valuation of Inventory.

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