Whether covers under tax audit or not

Total proceeds which you are getting from granite owners are supposed to be distributed to lorry owners....the proceeds are not your income it is your liability which is to be paid to lorry owners...Do not account it as your income....the entry would be as follows:-

Bank A/c Dr...........................Amount of proceeds received from granite owners

To Lorry owners..............................................

As you have no right on proceeds you have to give it to the lorry owners you can not account it as your income hence no question of Tax audit on these proceeds as these proceeds do not form part of your income.

The commission received only is your income if it is crossing the taxable limit then it covers under the tax audit.

as Ca paru rightly said, your commission income would ony be eligible for tax audit and aso for deciding whether tax audit applicable or not.. provided accounting treatment has to be show as said in first reply..

During assessment, you may face problem..better you get the comission agreement entered into with all lorry owners or if its not possible with all, atleast with big lorry owners from whom large amount of comission flows to you in order to substantiate the transactions and facts during assessments.

Thanks and regards,

manoj B. Gavali

the substanse of the transaction is whether proceeds accruing to you are your income or ot, in the above case, as correctly mentioned, the income can be brought under purview of Tax audit if and only if commission income exceeds 60 lacs or more..