44AB Vs AS-9

As per my opinion the company liable to tax audit u/s44AB. I could not under stand Gross receipts meas
 

I meant cash received only 35 lakhs,

so we can ignore the gross receipts aspect... i.e.,

just on the basis of turnover, whether tax audit necessary?

Good Morning Bhai......!

I must tell u nw I have one more reason to log on to this site cos I find ur changing names n pics quite interesting n funny attimes....:) (In a good sense obviously)

Coming to Ur question - Bhai I think -

AS-9 requies "Provision to be made based on past experience of sales return/warranties"  I mean in ur example A Ltd. has to recognize its Turnover @ 40.50 Lacs, only thing is Altd. will also make a provision of Rs. 1 Lac asainst expected return.

Now Tax Audit will be required since Rs. 1 LACS IS NOT THE ACTUAL RETURN WHICH CAN BE REDUCED FROM THE TURNOVER IT'S JUST AN EXPECTATION/PROVISION.

Needless to say Rs. 1 Lac will not be allowed as deduction....

Good Afternoon

sir there is not applicattion of AS in income tax act,

Hi friends,

Thanks for replying.... solved...

Gaurav bhai, section 145 does not say that AS is irrelevant.....

But

I-know-nothing

nice explanation Mr Amir

In my opinion the company should recognised the revenue of Rs. 4 lacs for march beacuase when the property in the goods alongwith risk & rewards has been transferred and there is reasonable certainty regarding the collectibilty at the time of sale. and if there is any uncertainty regarding the collectibily subsewuent to the sale the provision should be made for the same i.e. Rs. 1 lacs. And as per 44AB Gross Turnover would be Rs. 40.50 lacs(36.5+4) and no provision would be allowed for sales return.