Inter State Stock/Branch Transfer - GST/Audit Mismatch

CA Rohit Garg (48 Points)

15 September 2023  

I have one has 2 branches one in Delhi and one in Haryana.

Delhi Branch Sale - 2.5 Cr.
Haryana Branch Sale - 1 Cr.
Total Sale as per GST - 3.5 Cr.

But Haryana branch only transfers stock to Delhi branch and no outside sale.
Now, as per Income Tax audit will be done on 2.5 cr.

Can we show Rs. 3.5 cr. sale in ITR, as sale and purchase of 1 cr. will be set off against each other and no impact on GP/NP.

Because if we state 2.5 cr. sale in ITR, then we can get notice from Income Tax department and it can lead to unnecessary litigation.

If anyone of you have any such client, please respond how are dealing with the same in audit and ITR?