Gross receipts under tax audit rules exclude a write-back of earlier interest expenditure shown as other income.

Write-back of earlier years' interest expenditure shown as other income did not constitute sales, turnover or gross receipts for section 44AB, because gross receipts in that context mean business receipts arising from operations. As the assessee had nil revenue from operations and the amount was only a reversal pursuant to settlement, the compulsory audit threshold was not triggered. The return therefore could not be treated as defective under section 139(9) merely for absence of audit under section 44AB.

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Issues: Whether the write-back of earlier years' interest expenditure, shown as other income, formed part of total sales, turnover or gross receipts so as to attract compulsory audit under section 44AB, and whether the return could be treated as defective under section 139(9) for want of such audit.

Analysis: Section 44AB applies where a person carrying on business exceeds the prescribed threshold in total sales, turnover or gross receipts. The expression "gross receipts" must be understood in the same commercial sense as turnover, namely receipts arising from carrying on business. The assessee's revenue from operations was nil, and the amount reflected as other income represented only a reversal of earlier years' interest expenditure pursuant to a settlement, not receipts from business operations. Such write-back may be relevant for computation of income, but it does not acquire the character of sales, turnover or gross receipts. On that basis, the audit requirement was not attracted, and the return could not be rejected as defective merely for absence of audit under section 44AB.

Conclusion: The write-back amount did not constitute gross receipts for section 44AB, and the defective-return action under section 139(9) was not sustainable.

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