Applicability of accounting standards

Yes you have to follow accounting standards.

ICAI requires its members to ensure compliance with applicable accounting standards when they perform any attest function.

Since your turnover is Rs.100 crore, you have to get your books audited under the Income Tax Act by a CA.

That means the CA has to check if you follow applicable AS, including ASIT 1 and ASIT 2 for tax audits.

Moreover, reporting enterprise does not mean you are answerable to someone,

it means you are reporting your financial results to someone, including owner of the business.

Exclusion from AS is only if the business is wholly non-commercial.

Even if activity is partly commercial or partly business or partly industrial, then you have to follow AS for all activities being reported by the enterprise.

This is also subject to statutory requirements, like under the (companies act or) Income Tax Act.

SO YES, FOLLOW AS.

@ g.k. : If my turnover is below 60 lacs then in that case I do not need Tax Audit. In that case, would I have to follow AS? Because AS that are applicable to level III are still applicable to me. But in this case there is no one to verify if I am following AS or not. And also I am not reporting to anybody except myself so can I prepare Fin. Statements according to my convenience i.e. without AS.

From tax angle, you need not follow AS.

You just have to follow a regular method of accounting. You only have to comply with ASIT 1 and ASIT 2 if you are following Mercantile system of accounting (accrual basis).

For cash basis accounting, you need not follow those AS also.

But i suggest that u follow AS in preparing financial statements, in case you have to produce accounts before someone else for some reason like Bank Loan or CA certification for Visa purposes.

Regards.