Tax audit

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whether Guidance Note by ICAI on Tax audit require compliance.

As per Sec. 44AB , if gross turnover Exceeds Rs. 1 Crore, then asseses is liable to tax audit.Wheher Sales Return, discount, Rebates are to be deducted?

As per Guidance note, it is to be deducted, but i m confused whether such guidance is applicable for Sec.44AB.

Please Reply

Replies (2)
Yes the Guidence Note is applicable to 44AB.
In case of discounts, you can consider the below details:
Trade Discount: Trade Discounts can be deducted from sales. Trade Discounts are generally allowed in the sales invoice, therefore the discount allowed in the sales invoice will reduce the sale price and therefore can be deducted from the turnover.
Cash Discount: Cash Discount otherwise than that allowed in a cash memo/sales invoice is in the nature of a financing charge and a revenue receipt and is not related to turnover. Hence the same should not be deducted from turnover

where it has been stated. whether in income tax act or any other act to follow such guidance.

Also guidance notes are only for guidance.


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