Upload
jessie-harmon
View
222
Download
1
Embed Size (px)
Citation preview
-BY CA MAHENDRA SANGHVI
Tax Audit u/s. 44AB of the Income Tax Act,
1961.
Business Vs. Profession
05th September,2015CA Mahendra Sanghvi
Section 2(13) : “Business includes any trade,
commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture”
Section 2(36) : “Profession includes vocation”
CIT Vs. Manmohan Das (1966) 59 ITR 699 (SC) : Profession involves Intellectual skill or Manual skill controlled by intellectual skill Different than an operation which is substantially the
production or sale or arrangement for production or sale of commodities.
2
3
05th September,2015CA Mahendra Sanghvi
The term ‘turnover’ for this clause may be interpreted to mean the aggregate amount for which sales are effected or services rendered by an enterprise.
Where the business is covered by section 44AD or 44AE and the assessee opts to be assessed under the respective sections on presumptive basis, the turnover thereof shall be excluded.
Turnover
05th September,2015CA Mahendra Sanghvi
4
Turnover
Nature of business
What is Turnover ICAI Guidance Note (GN), 2014
Day trader/ speculator
Sum total of differences, whether positive or negative
Para 5.14(a) of ICAI GN
Security derivatives transactions
Sum total of differences, whether positive or negative, also amount paid on premium on sale of options
Para 5.14(b) of ICAI GN
Commodity derivatives transactions
-In case of settlement without delivery, sum total of differences, whether positive or negative- in case of delivery, total value of sales
Para 5.14 (b) & (c) of ICAI GN
5Clauses f rom 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 13a. -------b. -------c. -------d. Details of deviation, if any, in the method of accounting employed in the previous year from accounting standards prescribed under section 145 and the effect thereof on the profit or loss. As per the accounting standard (IT) – 2 any change in
accounting policy which has a “material effect” is required to be disclosed. And change in the method of valuation of closing stock would amount to change in accounting policy and needs to be suitably stated under this clause.
6
CLAUSE 16 Amounts not credited to the profit and loss account, being,-
a.) the items falling within the scope of section 28;o any interest, salary, bonus, commission or remuneration, by
whatever name called, due to, or received by, a partner of a firm from such firm:
Provided that where any interest, salary, bonus, commission or remuneration, by whatever name called, or any part thereof has not been allowed to be deducted under clause(b) of section 40, the income under this clause shall be adjusted to the extent of the amount not so allowed to be deducted;
b.) ------c.) ------d.) any other item of income;e.) Capital receipt, if any.
Clauses f rom 3CD Report
CA Mahendra Sanghvi 05th September,2015
7
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 17 Where any land or building or both is transferred during the
previous year for a consideration less than value adopted or assessed or assessable by any authority of a State Government referred to in section 43CA or 50C, please furnish:
Details of Property
Consideration received or accrued
Value adopted or assessed or assessable
8
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 18 Particulars of depreciation allowable as per the Income tax Act, 1961
in respect of each asset or block of assets as the case may be, in the following form:-
(a) ------(b) ------(c) Actual cost or written down value, as the case may be;(d) Addition / deductions during the year with dates; in the case of any
addition of an asset, date put to use including adjustments on account of -
i) ------ii) change in rate of exchange of currency, and iii) subsidy or grant or reimbursement, by whatever name called.
(e) Depreciation allowable.(f) ------
9
05th September,2015
Depreciation on Intangibles
Clauses from 3CD Report
CA Mahendra Sanghvi
Item Citation Whether depreciation allowable
License of “toll collection”
Ashoka Info. (P) Ltd –(2009) 22 DTR 60 (Pune) (trib)
YES
Non-compete fees Medicorp Technologies India Ltd. – (2009) 30 SOT 506 (Mad) & ACIT vs. GE Plastics India Ltd (ITAT Ahmedabad) ITA no.483/Ahd/2007
Real Image - (2009) 120 TTJ 983 (Mad)
YES
NO
Restrictive covenant – non-compete to director
Srivastan Surveyors P. Ltd – (2009) 318 ITR 283 (Mad) (AT)
YES
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
10
Depreciation on IntangiblesItem Citation Whether
depreciation allowable
Brand Name KEC International Ltd v/s ACIT–unreported decision in ITA No.4420/Mum/2009
YES
Commercial Rights of exploration of mineral oil
ONGC VIDESH Ltd. – (2010) 33 DTR 22 (Trib)
YES
Acquiring skill and know-how of employees of business taken over
BOSCH Ltd v/s CIT – unreported decision in ITA No. 329/Bang/09
YES
Stock Exchange Card CIT v/s Techno Shares and Stocks Limited v/s CIT [2010] 327 I.T.R. 323 (SC)
YES
11
05th September,2015CA Mahendra Sanghvi
Clauses from 3CD Report
Depreciation on Intangibles
Item Citation Whether depreciation allowable
Goodwill Hindustan Coca Cola Beverages (P) Ltd. – (2009) 34 SOT 171 (Del)
YES
Goodwill Cit V. Smifs Securities Ltd [2012] 24 taxmann.com 222 (SC)
YES
12
05th September,2015CA Mahendra Sanghvi
CLAUSE 19
Amount admissible under sections:
Clauses from 3CD Report
Section Amount debited to profit & loss account
Amounts admissible as per the provisions of the Income-tax Act, 1961 and also fulfils the conditions, if any specified under the relevant 14 provisions of Income Tax Act.1961 or Income tax Rules,1962 or any other guide-lines, circular, etc. issued in this behalf
32AC
33AB ----- -----
33ABA ----- -----
35(1)(i) ----- -----
35(1)(ii) ----- -----
35(1)(iia)
----- -----
35(1)(iii)
----- -----
35(1)(iv)
----- -----
35(2AA) ----- -----
35(2AB) ----- -----
13
Clauses from 3CD Report
05th September,2015
CLAUSE 21a) Please furnish the details of amounts debited to the profit and loss
account, being in the nature of capital, personal, advertisement expenditure etc.
CA Mahendra Sanghvi
Nature Sr No. Particulars Amount in Rs.
Capital expenditure
Personal expenditure
Advertisement expenditure in any souvenir, brochure, tract, pamphlet or the like, published by a political party
----- ----- -----
Expenditure incurred at clubs being entrance fees and subscriptions
----- ----- -----
Expenditure incurred at clubs being cost for club services and facilities used.
----- ----- -----
14
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
Nature Sr No. Particulars Amount in Rs.
Expenditure by way of penalty or fine for violation of any law for the time being force
Expenditure by way of any other penalty or fine not covered above
Expenditure incurred for any purpose which is an offence or which is prohibited by law
15
05th September,2015CA Mahendra Sanghvi
CLAUSE 21(b) Amounts inadmissible under section 40(a):-
(i) as payment to non-resident referred to in sub-clause (i)(ii) as payment referred to in sub-clause (ia)
(iii) ----- (iv) ----- (v) ----- (vi) ----- (vii) ----- (viii)-----(c) ----------(d) ----------(e) ----------
Clauses from 3CD Report
16
05th September,2015CA Mahendra Sanghvi
Clauses from 3CD Report
CLAUSE 21
(f) ----------(g) ----------(h) amount of deduction inadmissible in terms of section 14A in
respect of the expenditure incurred in relation to income which does not form part of the total income;
(i) amount inadmissible under the proviso to section 36(1)(iii)
17
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 26 In respect of any sum referred to in clause (a), (b), (c), (d), (e) or (f)
of section 43B, the liability for which;- (A) pre-existed on the first day of the previous year but was not allowed in the assessment of any preceding previous year and was; (B) was incurred in the previous year and was ; ------------------ ------------------
18
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 27
(a). Amount of Central Value Added Tax credits availed of or utilised during the previous year and its treatment in the profit and loss account and treatment of outstanding Central Value Added Tax credits in the accounts.
(b). Particulars of income or expenditure of prior period credited or debited to the profit and loss account.
19
05th September,2015CA Mahendra Sanghvi
Clauses from 3CD Report
CLAUSE 28
Whether during the previous year the assessee has received any property, being share of a company not being a company in which the public are substantially interested, without consideration or for inadequate consideration as referred to in section 56(2)(viia), if yes, please furnish the details of the same.
S.No. Name of the person from which shares are received
PAN of the person, if available
Name of the company whose shares are received
CIN of the Company
No. of shares received
Amount of consideration paid
Fair Market value of shares
20
05th September,2015CA Mahendra Sanghvi
Clauses from 3CD Report
CLAUSE 29
Whether during the previous year the assessee received any consideration for issue of shares which exceeds the fair market value of the shares as referred to in section 56(2)(viib), if yes, please furnish the details of the same.
S.No. Name of the person from whom consideration received for issue of shares
PAN of the person, if available
No. of shares issued
Amount of consideration received
Fair Market value of shares
21
05th September,2015CA Mahendra Sanghvi
CLAUSE 31(a)*Particulars of each loan or deposit in an amount
exceeding the limit specified in section 269SS taken or accepted during the previous year:-(i) name, address and permanent account number (if available with the assessee) of the lender or depositor;(ii) amount of loan or deposit taken or accepted;(iii) whether the loan or deposit was squared up during the previous year;(iv) maximum amount outstanding in the account at any time during the previous year;(v) whether the loan or deposit was taken or accepted otherwise than by an account payee cheque or an account payee bank draft
Clauses from 3CD Report
22
Clauses f rom 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 31(b)*Particulars of each repayment of loan or deposit in an
amount exceeding the limit specified in section 269T made during the previous year:- (i) name, address and permanent account number (if available with the assessee) of the payee;(ii) amount of the repayment;(iii) maximum amount outstanding in the account at any time during the previous year;(iv) whether the repayment was made otherwise than by account payee cheque or account payee bank draft;
23
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 31
(c) Whether the taking or accepting loan or deposit, or repayment of the same were made by account payee cheque drawn on a bank or account payee bank draft based on the examination of books of account and other relevant documents;
24
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 32(a). Details of brought forward loss or depreciation allowance, in the following manner, to the extent available:
Serial Number
Assessment Year
Nature of loss/allowance(in rupees)
Amount as returned(in rupees)
Amounts as assessed(give reference to relevant order)
Remarks
25
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 32(b). -----------
(c). Whether the assessee has incurred any speculation loss referred to in section 73 during the previous year, If yes, please furnish the details of the same.
(d). -----------
(e). In case of a company, please state that whether the company is deemed to be carrying on a speculation business as referred in explanation to section 73, if yes, please furnish the details of speculation loss if any incurred during the previous year.
26
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 34(a). Whether the assessee is required to deduct or collect tax as per the provisions of Chapter XVII-B or Chapter XVII-BB, if yes please furnish:
Tax deduction and collection Account Number (TAN)
Section Nature of payment
Total amount of payment or receipt of the nature specified in column (3)
Total amount on which tax was required to be deducted or collected out of (4)
Total amount on which tax was deducted or collected at specified rate out of (5)
Amount of tax deducted or collected out of (6)
Total amount on which tax was deducted or collected at less than specified rate out of (7)
Amount of tax deducted or collected on (8)
Amount of tax deducted or collected not deposited to the credit of the Central Government out of (6) and (8)
27
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 34(b). whether the assessee has furnished the statement of tax deducted or tax collected within the prescribed time. If not, please furnish the details:Tax deduction and collection Account Number(TAN)
Type of Form Due Date furnishing
Date of furnishing if furnished
Whether the statement of tax deducted or collected contains information about all transactions which are required to be reported
28
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 34
(c). whether the assessee is liable to pay interest under section 201(1A) or section 206C(7). If yes, please furnish:
Tax deduction and collection Account Number(TAN)
Amount of interest under section 201(1A)/206C(7) is payable
Amount paid out of column (2) along with date of payment
29
Clauses from 3CD Report
05th September,2015CA Mahendra Sanghvi
CLAUSE 37
Whether any cost audit was carried out, if yes, give the details, if any, of disqualification or disagreement on any matter/item/value/quantity as may be reported/identified by the cost auditor.
30
05th September,2015
Clauses from 3CD Report
CA Mahendra Sanghvi
CLAUSE 38
Whether any audit was conducted under the Central Excise Act, 1944, if yes, give the details, if any, of disqualification or disagreement on any matter/item/value/quantity as may be reported/identified by the auditor.
31
05th September,2015
Clauses from 3CD Report
CA Mahendra Sanghvi
CLAUSE 41
Please furnish the details of demand raised or refund issued during the previous year under any tax laws other than Income Tax Act, 1961 and Wealth tax Act, 1957 alongwith details of relevant proceedings.
S.No. Financial Year to which demand/refund relates to
Name of other Tax Law
Type(Demand raised/ Refund received)
Date of demand raised/refund received
Amount Remarks
32
05th September,2015
THANK YOU
CA Mahendra Sanghvi