TaxTMI 
TaxTMI 
2024 (12) TMI 500
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....d 23-11-2021 under Section 154 of the Act for the Assessment Year (AY) 2018-19 passed by the Assistant Commissioner of Income Tax, Circle 3(1)(1), Ahmedabad [hereinafter referred to as "AO"]. Facts of the case: 2. The assessee is engaged in the business of electrical contracting, trading in electrical equipment, and providing industrial and commercial electrical services across India. The assessee filed its return of income for A.Y. 2018-19, declaring total income of Rs. 3,10,65,024/- on 31/10/2018. The return was processed under Section 143(1), a demand of Rs. 1,08,57,395/- was raised. The assessee observed the error in computation of tax liability and credit on account of TDS. Therefore, the assessee filed an application for rectificati....
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....LL AS ON FACT IN UPHOLDING 'TURNOVER OF APPELLANT AT Rs. 51,18,86,268 FOR THE PURPOSE OF TAX COMPUTATION, WHICH FACTULLY INCULDES BRANCH TRANSFER OF Rs. 1,41,39,000 RESULTING INTO ACTUAL TURNOVER OF Rs. 49,77,47,420. 3. LD. CIT(A) ERRED IN LAW AS WELL AS ON FACT IN UPHOLDING TAX RATE OF 30% INSTEAD OF 25% BASED ON ACTUAL TURNOVER OF Rs. 49,77,47,420. 5. During the course of hearing before us the Authorized Representative (AR) of the assessee stated that the company has multiple branches in different parts of India and the company transfers goods from one branch to another branch. The AR further stated that the assessee by mistake included inter branch transfers in both total sale and purchase as reflected in the profit and loss account. ....
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....and Accounting Standards, only revenue from external customers qualifies as turnover. Inter-branch transfers, which do not involve realizations, should be excluded unless otherwise required by specific tax regulations. 7.3. Under indirect tax laws (VAT in the present case), branch transfers are considered "supplies" and included in the aggregate turnover for compliance thresholds. However, such treatment under VAT does not automatically apply to income tax computations, as the concepts of "turnover" and "aggregate turnover" differ in these contexts. 7.4. We also note that the assessee provided a Chartered Accountant's certificate and detailed reconciliation statements substantiating that the amount of Rs. 1,41,39,000/- represents inte....