Checklist for Tax Audit of Manufacturing Companies

Deferred Tax Assets and Liabilty reversal
* Reconcilation with IT profit and Book Profit
* for IT and Company Depreciation
* Section 43A  adjustment
* Timing difference  reversal in the subsequent year
* for Unabsorbed Dep
* for Carried forward Loss
* for deferred expenses
* disallownces under section 40(a)(ia),
* Section 43B Payments ie disallowed earlier year and now allowed in memo
* Opening restatment for the current year
Reconcilation of 
* VAT   With Return and reconcile with Turnover
*Excise  With ER-1 and  reconcile with Turnover
*CST    -CST Return  and reconcile with Turnove
*TCS     -Reconcil with Scrap Sales Ledger and Apply  TCS %
TDS/TCS Deduction and payment analysis
* Quarterly  Return submitted by the compay for E-TDS
* Analysis of payment with ledger and challan
** Reconcile the amount of TDS with Profit and loss account for finding out Tds short deduction and non deduction.
** Non deduction and short deduction  gross expenses to consider for disallowance under section 40(a) (i), 40(ia) etc
                TAX AUDIT COVERAGE
Imporatant Aspects to be covered in IT Memo Prepartion
* Give Proper Link of PAT from PL  for the IT and 115JB 
* Allow the Exp – Already disallowed in the previous year Memo
     ** confirm whether they have paid  during the year
 ** Prepare a list for 40A(3) Payments and give link to Memo
** Give proper link to Loss on sale of assets (Add) and Profit on Sale of Assets (Less) in the memo
** Give Proper link to 43A Adjustment for capital goods fluctuation
** Proper Link to IT and Compay Act Depreciation for workings
** Separte the Non Business income  to other Heads-eg Dividend
** Disllowable Exp List
Disallowable Expenses Analysis
* Donation
*TDS Interest   –
*Fine and penalty
*Cash payment Exeeding Rs20000 
Sec 40A(2) Excess payment than Normal payments
*Pooja Exp
*Under section 40(a) (Non Deduction of TDS)
*Sec 40(ia)a and nature of TDS disallowances
proviso to section 36(1)(iii)
of section 43B- Bonus,gratutity ,
Delay in payment of employee contribution in conection with PF, ESI
Other Details for 3CD 
**List of Payment under section  40A(2)(b).(Related Party Payments)
**Payment of gratuity not allowable under section 40A(7)
**Priliminary Expens under Section 35D
115JB Calculation
** Calculation for unabsorbed dep and business loss
** Make correct provision for 115JB
** Consider the Credit of privious year then make provision
** Book Entries for 115JB MAT Provision and Credit Adjustment
** Make correct provision for 115JB after considering PY MAT cr u/s 115JJA
** Preparation of Form 29B for MAT calculation ( if MAT applicable )
** prepare a sheet for Advance Tax and interest workings
** TDS Receivable working as per uploadable foramt .
** Assessment Status
** Excise duty 
** VAT Annexure
** ESI and PF Annexure
** TDS and TCS Annexure
** IT Depreciation
** Stock Qty Annexure
** Set off and Carried forward Annexure
** Calculation of Ratio
** Annexure I Part A,B
* Parent company address  ( Associated Enterprises )
* % of Share holding
* Details of RM imported and quantity wise break up
* Details of CG imported and quantity wise break up
* Details of Technical fee
* Details of Running Royalty exp to AE
* Reconcilation in Tally with Excell of the Associated Enterprises
* Method of Arm Length Price
* Calculation of operating profit for adopt suitable method of ALP
** Cash flow Statements ( if Company turnover >50 crore ) and Level I  Enterprises
** Fund Flow Statement
** Details of Contingent Liabilities
** List of Assessment Pending with IT Department  and other Departments
**List of cases which are under Litigation
**Report of Internal Auditors
Requirements Regarding E-filing of Income Tax Return and ROC Return
Signed Trial balance
Copy of PAN Card
Copy of TAN Card
Copy of Income Tax Challans
Copy of TDS Certificates
Copy Memorandum of Association
Copy of Incorporation Certificate
Auditors Appointment Letter
List of Directors along with complete address, designation, and date of joining for the previous year
List of share holders along with complete address and number of shares holds in %.
Digital Signature of Director of the Company
DIN of the Directors
List of transfer of shares as on the date
CIN number of the Company
Secretarial Requirements
Increase in Share Capital
Apppionment / Resignation of Director details
Co Audit Details
AGM/ EGM Details
Resoluation Copies
Charge Creation Details
Directors Remuneration details under sec 217(2A)
Document Evidence for 
** Authorised capital
** Paid up Capital
** Present directors/  verification and Management certificates
** Change of directors
**Present share holders/ changes  and verification with 
members register and Management certificate.
Register of investments not held in company’s name
Register of Deposits
Creation/modification/satisfaction of charge & keeping a record of the charges
Register of charges
Register of members
Index of members where their number is more than 50
Register and index of debenture holders
Foreign register (and a duplicate) of members and debenture holders, if any 
Copies of all returns u/s 159 & 160
Minute books containing minutes of the proceedings of general meetings, board meeting & committees of the board
Books of accounts
Register of contracts, with companies and firms, in which directors are interested giving details
Register of contracts with companies and firms in which directors are interested directly or indirectly
Register of directors, managing directors, managers and secretary
Register of directors shareholding 
Register of appointment of directors or an associate as a selling agent outside India of goods produced by the company, and for supply of or rendering of service
Register of loans to companies ‘under the same management’
Register of loans made, guarantees given or securities provided to companies and investments in shares and debentures of other companies
Information pursuant to Section 217(1)(e)
   Power and fuel consumption
a)  Purchased Power (KWH)
     Total Amount (Rs. In lacs)
     Rate/KWH (Rs)
b)  Own Generation (KWH)
     Diesel Generator
     KWH Per Litre of Diesel Oil
     Cost/KWH (Rs.)
     Quantity (Litre)
     Amount (Rs. In Lacs)
     Rate (Rs/litre)
Consumption per unit of Production
Technology Absorption Expenditure (Rs. In lacs)
Foreign Exchange Earnings (Rs. In Lacs)
Foreign Exchange Outgo (Rs. In Lacs)
Preparation of General Business profie as per SCH VI


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