Legal Agreements

Form 3CA-3CD

The section 44AB of the income tax act 1961 requires the assessed to file their tax audit report if their turnover exceeds 1 crore.

Further, there is also a presumptive income section under income tax act 1961 (mentioned below) where the assets require filing their tax audit where he claims his income below such percentage. The tax audit shall be conducted by a Chartered Accountant in Practice.

Further, the tax audit report is to be filed online through the following website:

(http://incometaxindiaefiling.gov.in/downloads/offlineUtilities?lang=eng)

Now we will discuss clause by clause detail of Tax audit

The First page of the Tax audit (3CA-3CD) provide the instruction  that we need to follow before filling the Tax audit Report These instruction are

General Instruction

1. The amount must be in Indian Rupees.
2. The date shall be entered in the following format (DD/MM/YYY). Usually, we follow Indian Financial Year i.e. from 1^st April to 31^st March
3. All greyed out Filed are either auto-filled or non-editable.
4. Any attachment shall be in PDF format only and such attachment shall be attached at the time upload only.
5. Add button for adding a row and delete button for deleting the row.
6. Enter information in percentage whenever needed.
7. Verify all the form and related information before submission.
8. Import CSV File for Clause 18 (Depreciation)
9. Only use the following browser for the view/ print.
   1. Google Chrome
   2. Mozilla Firefox
   3. Internet Explorer 9.0 and above.
10. Only XML File to be uploaded.

The CA in practice must indicate there MEMBERSHIP NUMBER/CERTIFICATE OF PRACTICE NUMBER/ FRN NUMBER.

1. Only Red mark field is mandatory. 

FROM 3CA (Clause 1- 3)

Caluse1:- In clause 1 we file the following details:-

• I/we ( whether the auditor is signing individual capacity or Firm Capacity )
• Name of the Company /Address/Name of the Statutory Auditor/period of Audit
• In case change in name, both names should be stated like XYZ Private Limited (Formerly Known as ABC Private Limited)

Clause 2:- The Statement of particulars required to furnished u/s 44AB is annexed herewith in FORM 3CD

Clause 3:-

-Observation /Qualification (17 Qualifications Type)

• Name of CA/Membership Number /FRN Number (Not mandatory)/Address/Date

Form No.3CA Part a (Clause 1- 8)

Clause 1:- Name of the Assessee (e.g. XYZ Private Limited). In case change in name, both names should be stated like XYZ Private Limited (Formerly Known as ABC Private Limited)

Clause 2:-Address of the Assess i.e. that Address which assess want to use for the communication purpose with Income Tax Department.

Further in case of a change in address after the completion of the financial year but before the tax audit report, the fact must be stated in the form 3CD

Further provided that if there is the principal place of business which is other than registered office then the fact must be stated.

Clause 3:- PAN Number of the Assesse ( It is advisable that in case of New Firm/AOP etc. the must be taken as soon as possible before the tax audit report because it is a mandatory filed that need to be entered)

Further for the new company incorporation, you can easily find the PAN Number on Certificate of incorporation. You need not file the separate application of PAN.

Read, Also: Who is Incompetent to Contract?.

Clause 4:-If assessee is liable to pay indirect Tax (Custom, GSTIN Etc.) then Registration number all Authorities other than Direct Tax shall be mentioned there.

Clause 5:- Status of the Assesse as per section 2(31) of the Income Tax act 1961.

(Individual/HUF/Firm/LLP/Company /Trust/AOP/BOI/Local Authority/Artificial Judicial Person/Co-operative Society / Co-operative Bank)

There may be a dispute regarding the Status of the assesse then facts must be stated e.g. Partnership firm may be treated “as such” or AOP. Co-operative societies and co-operative banks are the artificial judicial person

HUF:- HUF is not defined under the income tax act 1961. It is defined under the Hindu Law as a family that consists of all person lineally descended from a common ancestor, including wives and unmarried daughters.

FIRM:- If two or more person is registered as a partner in a firm as per partnership Act 1932 then this shall be known as partnership Firm.

In General practice, the Proprietorship firm is also registered as Firm.

LLP:- LLP means Limited liability partnership which is registered under Limited liability Partnership Act 2008

Company: – Company is an artificial person which registered under the Companies Act 2013 or any previous law.

Trust:-  Trust is an obligation annexed to the ownership of the property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner “Trivia :

AOP/BOI:- The AOP under the Income Tax Act is an entity or unit of assessment. It means two or more person who joins for a common purpose with a view to earning an income. The AOP is formed intentionally, however, the BOI is not formed intentionally but due to certain compulsion eg. Sharing the income from a common undivided ancestral.

The term person includes company, association or body of individuals, whether incorporated or not.

Local Authority:- Means Panchayat, Municipality, Municipal Committee and District board, Cantonment Board, any other authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund.

Artificial judicial person:-  A public corporation established under the special act of the legislature and a body having the juristic personality of its own are known to be Artificial Judicial persons Eg university

Co-operative Society:- it is basically like an AOP but it is registered under the co-operative society Act.

Co-operative Bank:- It is a bank which is only for the Benefits for their members. It provides its financial service to its members only.         

Eg.  

1. Enterslice Its Private Limited ( “Company”)

ii.State Bank of India ( “ Company”)

iii. Delhi University ( “ Artificial Judicial Person”)

1. Municipal Corporation of Delhi ( “Local Authority”)

v  Partnership Firm (“Firm”)

1. Gupta Parivar consisting only Family members (“HUF”)

vii. Reserve Bank of India ( “ Artificial Judicial Person”)

vii. Narendra Modi ( “Individual”)

viii.Gramin Panchayat ( “ A Local Authority”)

ix.Marked housed  ( “AOP”)

x Adarsh Charitable Trust  ( “Trust”)

xi Kangra Co-operative Bank ( “Co-operative Bank”)

Clause 6:- Previous Year details ( i.e 01/04/XXXX to 31/03/XXXX)

Clause 7:- Assessment Year (if previous year is 2016-17 then Assessment year will be 2017-18).

Clause 8:- Relevant clause under which audit has been conducted:-

• Clause 44AB(a)-Total sales /turnover/gross receipt exceeding

Rs.1 Crore.

• Clause 44AB (b)– Gross receipt in profession exceeding Rs. 50 lakh.
• Clause 44AB( c )- i-Profit and gains lower than deemed profit u/s 44AE (i.e computing profit and gains of business of plying, hiring or leasing goods carriages

(for each vehicle 7,500/-  per month or part of the month

OR

Amount actually claimed)

(Whichever is higher)

• Clause 44AB( c )- ii- Profit and gain lower than deemed profit u/s 44BB (Assesse being non-resident, engaged in the business of providing services or facilities in connection with, or supplying plant & machinery on hire used, or to be used, in the prospecting extraction or production of mineral oils, a sum equal to 10% of the aggregate amount specified in 44BB(2)
• Clause 44AB( c )- iii- profit and gains lower than deemed profit u/s 44BBB (Provision for computing profit and gains of foreign companies engaged in the business of Civil construction, etc ., in certain turnkey project i.e. 10% of the amount paid or payable (whether in India or outside India).
• Clause 44AB( d )- Profit and gains lower than deemed profit u/s 44ADA
• Clause 44AB( e )- Profit and gains lower than deemed profit u/s 44AD.
• Third proviso to section 44AB:- Audited under any other law.

Read our article:A Complete Overview of Section 45 of the Income Tax Act

Form 3CD Part B( 9-20)

Clause 9:- Particulars of firm/Association of persons indicate the name of the partner/members and their profit sharing ratio (In case of AOP, whether shares of members are indeterminate or unknown), change in PSR.

1. In the case of Firm or association of person indicate the name of the partners/members and their PSR.
2. This clause only applies to AOP and Partnership firm includes LLP, however, any firm registered outside India shall not be considered as firm and AOP in this case.
3. Change in PSR shall also be stated in the above clause. A further change in salary will be considered a change in PSR because the salary is the appropriation of profit not charge against the profit (CIT vs R.M. Chidambaram Pillay [106 ITR 292]). Hence auditor should verify from the partnership deed/supplementary partnership to deed whether there is change occurred during the previous year.
4. Change in partners shall be also stated in the above clause.

Clause 10:- Nature of business or profession (If more than one business is carried [each business or profession to be mentioned]).

• The expression business or profession should be given their meaning as per income tax act. However, the particular activity can be called business or profession will depend upon facts and circumstances.
• The business means which satisfy the following two conditions.

1. It shall be a continuous course of action and
2. It shall be carried with the profit motive.

Further the as per section 2(13) of the income tax act 1961 the term business means:-

-Trade – The term trade means which a person carries for procuring subsistence or profit, occupation or employment.

-Manufacturer- As defined in the Excise Act

• Any adventure or concern in the nature of trade, commerce or manufacture.

However, if there is an existing business is discontinued due to any reason then such change in business needs to be stated however if there is temporary cessation/change in business then there is no need to report the same in form.

Further, as per section 2(36) of the income tax act 1961, the term profession includes vocations.

The word vocation has not been defined under the income tax act 1961.

However the word profession involves the idea of an occupation requiring purely intellectual skills or manual skill controlled by the intellectual skills of the operator, as distinguished from an occupation or business which is substantially the production or sale, or arrangement for the production or sale of commodities (Addl. CIT vs. Ram Kripal Tripathi(1980) 125 ITR 408(All)).

Further, the profession is also defined under the section 44AA of the income tax act 1961

Clause 11:- a. Whether Books of accounts are prescribed u/s 44AA, if yes, List of Books so prescribed.

1. List of books of account maintained and the address at which the books of accounts are kept . ( if the books of accounts are maintained in a computer system, mention the books of account generated by such computer system. If the books of accounts are not kept at one location, please furnish the address of locations along with the details of books of accounts maintained at each location.)
2. List of books of accounts and nature of relevant documents examined.

As per section 44AA of the Income Tax Act, 1961 the following person required maintaining books of accounts

1. Every person which is carrying on the following profession:-

• Legal
• Medical
• Engineering
• Architectural profession
• Profession of accountancy
• Technical consultancy
• Interior decoration
• Any other profession notified by the government in the official

Shall keep and maintain such books of account and other documents as may enable the AO to compute his total income accordance with the provision of the act.     

1. Every person carrying on business or profession (other than above mentioned)
2. If his INCOME from business or profession exceed 1,20,000/- OR

His TOTAL sales, turnover or gross receipt (as the case may be)  in business or profession is likely to exceed or exceeds 10 LAKH (In INR) in any one of the three years immediately preceding the previous year: or

1. In case of newly set up business or profession:- if his INCOME from business or profession is likely to exceed 1,20,000/- OR his TOTAL sales, turnover or gross receipt(as the case may be) in business or profession are or  is likely to exceed 10,00,000/-, during such previous year; or

• In the case of section 44AE, 44BB or Section 44BBB (DEEMED PROFIT), as the case may be, the assessee has claimed profit lower than deemed profit, during such previous year.

Following first proviso and second proviso shall be inserted to subsection (2) of section 44AA by the Finance Act, 2017, w.e.f. 01-04-2018:

Provided that in case of a person being an individual or HUF, the provision of clause (1) and clause (ii)  shall have an effect, as if for the words “1,20,000” the words “2,50,000” had been substituted :

Provided that in case of a person being an individual or HUF, the provision of clause (1) and clause (ii)  shall have an effect, as if for the words “10,00,000” the words “25,00,000” had been substituted :

1. The board may, having regard to the nature of business or profession carried on by any class of person, prescribe (Daily Case register to be maintained by medical professional ), by rules , the books of accounts and other documents (including inventories, wherever necessary ) to be kept and maintained under subsection (1) or subsection (2), the particulars to be contained therein and the form and the manner in which and the place at which they shall be kept and maintained.
2. Further, the board may prescribe the period of books of accounts to be maintained.

Clause 12:- Whether the profit and loss includes any profit and gain assessable on a presumptive basis, If yes indicate the amount and the relevant section (44AD, 44ADA,44AE,44AF,44B,44BB,44BBA,44BBB, Chapter XIII, First Schedule or any other relevant section )

1. In this clause, the auditor is required to mention that whether any amount of presumptive profit(referred above sections) is credited to the profit and loss account, if yes mentioned in the relevant section
2. The expression of other relevant section means that the CBDT may notify the relevant section in this regards in future.
3. The assessee is required to maintain the separate books of accounts for each type of business i.e. normal business and presumptive business.

Further where the assessee has maintained composite books of accounts for both business then the business income and presumptive income shall be separated on the basis of the evidence available with the assessee.

Further, it will be the duty of the auditor to verify the substance and report accordingly.

Clause 13:- Method of Accounting

1. Method of accounting employed in the previous year.
   • Cash System or
   • Mercantile system
2. Whether there had been any change in the method of accounting employed vis-à-vis the method employed in the immediately preceding previous years (Yes/No).
3. If the answer to (b) above in the affirmative, give details of such change, and the effect thereof on the profit loss.

S.No.	Particulars	Increase in Profit	Decrease in Profit

1. Whether any adjustment is required to be made to the profits or loss for complying with the provision of Income computation and disclosure standards notified u/s 145(2) (Yes/No).
2. If the answer to (d) above is in the affirmative, Give details of such adjustment.

In point (a) the method of accounting employed during the previous year must be stated however different business or profession may have different methods.

However, section 128 of the companies act 2013 the books of accounts shall be kept on an accrual basis and according to the double-entry system of accounting.

The assessee may have different methods according to their business nature however if there is a change in the method during the previous year then such change need to be reported in point (b) and further adjustment of income/loss of such shall be reported in point (d)

Section 145(1) of the income tax act 1961, deals with the method of accounting. The income chargeable under the head of “Profit and gains of business or profession” or “Income from other sources” shall be computed in accordance with either the cash or mercantile system of accounting regularly employed by the assessee.

Section 145(2) empowers the Central Government to notify in official Gazette from time to time to time, income computation and disclosure standards ( commonly known as “ICDS”) to be followed by any class of assesse or in respect of any class of income.

Further now the government has notified the 10 ICDS till now to be followed by all assesse other than individual or a HUF who is not required to get his account of one previous years audited according to section 44AB, following the mercantile system of accounting, for the purposes of computation of income chargeable to income tax under the head “Profit and gain of business or profession” or Income from other source from the A.Y. 2017-18

The notified “ICDS” is only applicable for the computation of income under the head of “Profit and gains of business or profession” OR “Income from other sources “. However, these ICDS shall not be used for the purpose of maintenance of books.

Further, if there are conflicts between the provisions of the act and ICDS then the provision of the act shall be prevail

The notified “ICDS” are:-

1. ICDS-I relating to the accounting policies.
2. ICDS-II relating to valuation of inventories
3. ICDS –III relating to construction contracts.
4. ICDS-IV relating to revenue recognition.
5. ICDS-V relating to tangible fixed assets.
6. ICDS-VI relating to the effects of changes in Foreign Exchange Rates.
7. ICDS-VII relating to government grants.
8. ICDS-VIII relating to securities.
9. ICDS-IX relating to borrowing costs.

10 ICDS-X relating to provisions, Contingent Liabilities, and contingent assets.

In point (d) we have to report that whether any adjustment required to be made to the profit or loss for complying with the provisions of income computation and disclosure standards notified u/s 145(2) (YES/NO)

If the answer of the point (d) is affirmative then adjustment of such shall be given in point (e) in this way:-

S. No.	ICDS	Increase in Profit	Decrease in Profit	Net effect

Further, in point (f), we have to make disclosure of the ICDS.

Clause 14:- Closing Stock

(a) Method of valuation of closing stock employed in a previous year.

(b) In case of deviation from the method of valuation prescribed u/s 145A, and the effect thereof on the profit and loss, please furnish

For point (a) the stock can be subcategorized under three head

• Raw Material
• Work in progress
• Finished Goods

The valuation of above-mentioned goods shall be as follow:-

• Raw material:- Cost or NRV (Whichever is lower)
• Work in progress:- Total amount of expenditure incurred on the units under progress until the time of valuation
• Finished Goods:- Cost or NRV (whichever is lower )

Section 145A of the income tax act 1961 deals with valuation of closing stock. This section provides the inclusive method of valuation of closing stock which means the stock shall include any tax, duty, fee actually paid by assesse to bring the goods to the place of its location as on date of valuation even if such tax, duty is refundable.

However, the AS-2 follow the exclusive method which means it only includes the all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to present location and conditions.

Further, as per AS-2 all the duties and taxes (Other than which are recoverable from the tax authorities) shall include in the closing stock.

Further in point (b) if there is a deviation in the method of valuation prescribed u/s 145A then the following adjustment shall be made.

S. No.	Particulars	Increase in Profit	Decrease in Profit	Net effect

Clause 15:- Details of the following particulars of the capital assets converted into stock in trade.

(a)description of Capital Assets	(b) date of acquisition	( c) cost of Acquisition	( d) The amount at which the assets are converted into stock in Trade

Under clause (a) The description of the capital assets is required to be given e.g. Shares, Security, land & building, etc.

Under clause (b) the date of acquisition shall be determined. For the Determination of acquisition of capital assets the Tax auditor shall advise seeing the financials of the Assesse

Further, the date of acquisition is important to determine the nature of asset whether the asset is long term or short term in nature.

Under Clause (c) the cost of acquisition shall be reported. The cost of Acquisition means the Actual cost of the Assets, not WDV.

Further, if the Assets acquired prior to the 1^st April 1981 then the value to be reported will be the actual cost of the assets. However, the assesse shall have the option to value the assets at market value or cost if the assets have purchased prior to the 1^st April 1981.

Further, if the assesse consider the market value then the market value of 1^st April 1981 shall be considered.

Under Clause (d) The FMV at the time of conversion shall be reported. However, the Tax auditor shall examine how the FMV has arrived.

Clause 16:- Amount not credited to the profit and loss account, being:-

• The Item falling within in the scope of section 28:-

Section 28 of the income tax act 1961 contain the inclusive list not exhaustive.

( https://www.incometaxindia.gov.in/pages/acts/income-tax-act.aspx)

• The proforma credits, Drawbacks, refund of duty of customs or excise or service tax, or service tax or refund of sales tax or VAT, where such credit, drawbacks or refund are admitted as due by the authorities concerned. 

In order to verify credits, drawbacks, refund of duty the Tax auditor is advised to review the relevant return of the Assesse.

Further, the term “admitted due to the authorities” means admitted during the relevant previous year. However, the unilateral claims not admitted by the relevant authority does not amount to claim admitted.

• Escalation claims accepted during the previous years.

The Escalation claims pursuant to the contract need to state here. However, the auditor needs to verify the contract whether the claim has been received as per the terms of the contract.

Further, where the claim made unilaterally or is sub- judice shall not be stated here.

• Any other item if income ;

Any other income means that income which is entered in the books of accounts but not has been credited in the profit and loss accounts and in respect to such income the Tax auditor on the basis of his professional judgment on the view that such income must be credited in the profit and loss account.

• Capital Receipt, If any.

The capital receipt does not define under the income tax act however through various court judgment it has been defined as a receipt that is not taxable under the income tax act unless specified by the act E.g. Government Grant

Clause 17:- where any land or building or both is transferred during the previous year for considerably less than the value adopted or assessed or assessable by any authority of a state government referred to section 43CA or 50C, please furnish:-

S. No.	Details of property	Address line	Consideration received or accrued	Value Adopted or assessed or assessable

Under clause 17 the reporting is only required where the consideration is less than Stamp duty value for land or building or both.

Section 43CA is applicable only for the land or building or both where the land or building or both is held as stock in trade, however, the 50C shall be applicable only in the case where the land or building or both is held as  Capital Assets.

Clause 18:-Particulars of depreciation allowable as per income tax act 1961 in respect of each asset, as the case may be, in the following the form:-

1. No.
2. Description of the block of the assets / Class of assets
3. Rate of depreciation
4. Opening WDV
5. Addition
   • Date of purchase
   • Date of put to use
   • Amount
   • CENVAT
   • Exchange rate change
   • Subsidy grant
   • The total value of the purchase
6. Deduction
   • Date of sale
   • Amount
7. Depreciation allowable
8. Written down value at the end of the year

• The block-wise depreciation charged under the income tax act 1961.
• An asset which has the same nature and rate shall be classified as a separate block.
• Under the Companies act 2013 the depreciation charged as per schedule II of the Companies Act 2013 however under the income tax act the depreciation charger as per section 32. The Schedule II and Section 32 has lots of difference in terms of rate and nature however for the tax audit purpose the rate as per section 32 shall be followed.
• Further, any difference (“timing difference”) in the amount of depreciation due to Schedule II and section 32 then deferred tax assets and liability shall be created as per AS-22.
• The auditor should verify the record for the consideration of half-rate depreciation or full rate depreciation.
• The auditor should verify that CENVAT credit on such goods has been excluded or not. The auditor should tally the records of assets with the Cenvat credit account.
• Grant OR subsidy shall be excluded from the cost of the assets (on receipt basis).
• The claim of depreciation on assets is mandatory.
• The Claimant need not be registered owner of the assets.
• sometimes the assets which have not been put to use but depreciation shall be charged on the assets due to their nature E.g. Fire extinguisher hence actual put to use of the assets shall not be relevant for the certain circumstances.

Clause 19- Amounts admissible under section:

S.No.	Section *	Amount Debited to Profit & Loss account	Amount admissible as per the provisions of the income –tax act 1961 and also fulfills the condition, if any specified under the relevant provision of income tax act 1961 or income tax rules 1962 or any other guidelines, circulars etc. issued in this behalf

 *

– Section 32 AC:- Investment in new plant or machinery

– Section 33AB:- Tea Development account, coffee development account, and rubber development account.

– Section 33 ABA:- Site restoration fund

– Section 35(1)(i):- Expenditure on scientific research

– Section 35(1)(ii) :- Expenditure on scientific research

– Section 35(1)(ii):- Expenditure on scientific research

– Section 35(1) (iii):- Expenditure on scientific research

– Section 35(1)(iv):- Expenditure on scientific research

-Section 35 (2AA) :- Expenditure on scientific research

– Section 35(2AB) :- Expenditure on scientific research

– Section 35 ABA:- Expenditure for obtaining the right to use the spectrum for telecommunication services.

–  Section 35 ABB:- Expenditure for obtaining a license to operate telecommunication services.

–  Section 35 AC:- Expenditure on eligible projects or schemes.

–  Section 35 AD:- Deduction in respect of expenditure on specified business

–  Section 35 CCA:- Expenditure by way of payment to associations and institutions for carrying out rural developments programmes.

–  Section 35 CCB:- Expenditure by way of payment to associations and institutions for carrying out programmes of conservation of natural resources.

– Section 35 CCC:- Expenditure on agriculture extension project.

– Section 35 CCD:- Expenditure on skills development project.

– Section 35D:- Amortization of certain preliminary expenses.

– Section 35 DD:- Amortization of expenditure in case of amalgamation or demerger.

– Section 35 DDA:- Amortization of expenditure in case of amalgamation or demerger.

-Section 35E:- Amortization of expenditure incurred under voluntary retirement scheme.

Clause 20:-

1. Any sum paid to an employee as bonus or commission for services rendered, where such sum was otherwise payable to him as profits or dividend .( Section 36(1)(ii))

• *Under the above point if the employer has paid dividend or share of profit to his employee then such amount shall not be allowed as expenses to the company since it is an appropriation of profit not charge against the profit.

Therefore auditor should ensure that if there is any such amount paid by the company then such amount shall not be considered as expenses to the company. The reporting under this clause applicable to the company and partnership firm only.

• AMD Metplast P. Ltd. v. DCIT 341 ITR563(DEL.)

In the Given case the company has paid the bonus amount in excess of the amount allowable as payment of Bonus Act 1965. Hence the excess of allowable as per the Act has been disallowed by the DCIT.(Currently allowable )

• The amount must be quantified.

1. Details of the contribution received from employees for the various fund as referred in section 36(1)(a) :

S.No.	Nature of Fund	Sum received from employees	The due date for payment	The actual amount paid	The actual date of payment to the concerned Authorities
1.	Provident Fund	XXXX	XXXX	XXXX	XXXX
2.	Superannuation Fund	XXXX	XXXX	XXXX	XXXX
3.	Gratuity Fund	XXXX	XXXX	XXXX	XXXX
4.	Any fund set up under the provision of ESI Act 1948	XXXX	XXXX	XXXX	XXXX
5.	Any other Welfare Fund	XXXX	XXXX	XXXX	XXXX

• Under this Clause, the reporting of the respective fund shall be done in above format.
• The actual date of payment shall be the date of clearance of Cheque.
• The reporting of professional tax shall not be made under this clause.
• Any other Welfare Fund E.g. “Good Work Rewards” This reward is given the companies to their employees by the Recommendation made by the management/ senior officials. Further, it is not considered as an excess bonus, any appropriation of the profit hence this is admissible as expenses. Hence it is allowed as business expenditure u/s 37(1) of the Act.

Clause 21 to 41 shall be uploaded soon. To be continued……………

Till time for any consultancy or professional related issue kindly visit www.enterslice.com  and request a call from our home page.

Our Recommendation: The Doctrine of Frustration under the Indian Contract Act, 1872.