Hi
This question is little bit tricky. Pz try.
Mr A is a Contractor who is specialized in demolition of large buildings. M/s ABC , Firm , is the owner of a multi storied building. Both accounts are liable for Tax Audit u/s 44AB of the Income Tax Act. Mr A and M/s ABC has entered into a contract and gist of the contract is as follows.
1. A will demolish the building with its manpower , machinery.
2. M/s ABC is the owner of the scarp.
3. A will sell the entire scarp on behalf of ABC. Invoice will be raised by ABC. Proceeds will be credited into ABC Account.
4. After that entire sale proceeds will be transferred to A account.
5. A will pay Rs.1000/- per Steel of MT and Rs.500/- per Wood of MT.
6. This payment is entered in A books as an expenditure.
7. What is the TDS liability by A and ABC. Here A is providing his Service , ABC is supplying old Building.
Regards
CA K Rajendra Prasad
CAclubindia
