DEPB - Mercantile or Actual

[VIRENDER PANDEY]

Whether amount of Duty Drawback recd. during the Financial Year will be included in the Gross Turnover for the purposes Tax Audit under the Income Tax Act? And Whether the DEPB is also to be recorded on mercantile basis or should be recorded only when recd. in actual?

[Rama Krishana]

DEPB is a business income and falling under section 28. Therefore, it is the part of gross turnvover for the purpose of tax audit u/s 44AB.

AI Summary

Duty Drawback and DEPB to be included in gross turnover for tax audit under Sections 28 and 44AB. A query was raised regarding whether the Duty Drawback received during a financial year should be included in the gross turnover for tax audit purposes under the Income Tax Act, and whether the Duty Entitlement Passbook Scheme (DEPB) should be recorded on a mercantile basis or only when actually received. The response clarified that DEPB is considered business income under Section 28 and should be included in the gross turnover for the purpose of tax audit under Section 44AB.