Tax audit clause 44

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Kkk
1204 Points Posted on 24 August 2022
is it mandatory to give reporting under clause 44 for audit for fy 2021-22
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On 24 August 2022 at 14:12 Report
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This discussion clarifies that Clause 44 of Form 3CD is mandatory for tax audits for the financial year 2021-22 (Assessment Year 2022-23) for all reports submitted after March 31, 2022. It also delves into the practical application of inventory valuation methods, including FIFO, and explains the concept of replacement cost in raw materials. The discussion highlights that inventory is valued at the lower of cost or net realisable value, with specific scenarios provided for when replacement cost is used, particularly when the finished product is expected to be sold below cost.

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SEO Sai Gr. Hosp.
212511 Points Posted on 24 August 2022

Yes, The Clause 44 of the Form 3CD is effective for Assessment Year 2022-23 i.e. for the Financial Year 2021-22 because the compliance of this clause was kept in abeyance till 31/03/2022 but for all the reports submitted after that date the clause is mandatory.

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On 24 August 2022 at 14:34
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3145 Points Posted on 24 August 2022
@ Dhirajlal rambhia sir, in what scenario the replacement cost is used in raw material could you please explain me what is a replacement cost when it is use?
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On 24 August 2022 at 15:46
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SEO Sai Gr. Hosp.
212511 Points Posted on 24 August 2022

Don't go too far, first solve easier problem. In the Petrol dealer sum, there is no requirement of replacement cost.

Whenever that will be required, I will mention it...

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On 24 August 2022 at 17:13
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3145 Points Posted on 24 August 2022
Dhiraj Lal rambhia sir I solved can I send it ,please check I did
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On 24 August 2022 at 17:14
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SEO Sai Gr. Hosp.
212511 Points Posted on 24 August 2022

Tell me what are the values of opening stock & purchase of the month in Rs.? 

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On 24 August 2022 at 17:28
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3145 Points Posted on 24 August 2022
Honourable Dhirajlal sir please check me sir,


1.valuation of inventory on Jun 21 on 30 the (FIFO) method


op.Inv ten thousand*92=920000
purchases twenty thousand*90=1800000
ten thousand*95=950000

Total purchases = 20+10= thirty thousand

sold twenty thousand and unsold is three thousand


three thousand*90= two lakh seventy thousand
ten thousand*95= nine lakh fifty thousand

_______________

twelve lakh twenty thousand

closing inventory
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On 24 August 2022 at 17:34
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SEO Sai Gr. Hosp.
212511 Points Posted on 24 August 2022

Very Good...

Correction... Sold 27000 lts & unsold ... 13000 lts.

Now calculate the cost of inventory sold during the month...

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On 24 August 2022 at 18:24
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3145 Points Posted on 24 August 2022
Cost of goods sold= ope.inve+ purchases-closing inventory= nine lakh twenty thousand+ twenty seven lakh fifty thousand - twelve lakh twenty thousand =24,50,000/_



sales - cogs

( thirty lakh forty thousand - twenty four lakh fifty thousand)...
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On 24 August 2022 at 18:28
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SEO Sai Gr. Hosp.
212511 Points Posted on 24 August 2022

That is Gross Profit...

What is Net Profit?

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On 24 August 2022 at 18:43
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3145 Points Posted on 24 August 2022
Sir ,net profit formula is Gross profit _ Expenses

so Gross profit ( thirty lakh fourty thousand _ twenty four lakh fifty thousand = five lakh ninety thousand..


so , 590000 - 4 lakh. = net profit 1,90,000
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On 24 August 2022 at 18:50
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SEO Sai Gr. Hosp.
212511 Points Posted on 24 August 2022

Hope you have understood it clearly, and not copied down from book...

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On 24 August 2022 at 18:56
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3145 Points Posted on 24 August 2022
Dear sir ,I just gothrough the sum and searched in Google some examples ,to be frank I will tell the truth ...



sir please explain me the Replacement cost in raw material usage ?? in what scenario they are using
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On 24 August 2022 at 18:58
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SEO Sai Gr. Hosp.
212511 Points Posted on 24 August 2022

Refer:  https://www.legalraasta.com/blog/as-2-valuation-of-inventories/

 

https://www.indianaccounting.in/2017/11/as2-practical-questions.htm l

& the attachment for clear cut definitions...

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On 24 August 2022 at 19:05
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3145 Points Posted on 24 August 2022
Sir please explain me the Replacement cost in raw material usage ?? in what scenario they are using
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On 24 August 2022 at 19:07

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