Gross earnings
31. (1) The gross earnings referred to in section 30 shall be the aggregate of the following:-
(i) the amount of any accrual or receipt from, or in connection with, the business;
(ii) the value of any benefit or perquisite, accrued or received from, or in connection with, the business; and
(iii) the value of the inventory of the business, as on the close of the financial year.
(2) The accruals or receipts referred to in sub-section (1) shall, without prejudice to the generality of the provisions of that sub-section, include the following :-
(i) the amount of any compensation or other payment, accrued or received, for-
(a) termination or modification of a business agreement or agency; or
(b) vesting of the management of any property or business
(ii) any consideration, accrued or received under an agreement for noncompete;
(iii) the value of any benefit or perquisite accrued to, or received by, a person, being a trade, professional or similar association, in respect of specific services performed for its members;
(iv) the amount of profits on sale of any licence obtained in connection with the business;
(v) the amount of profits on transfer of any right or benefit (by whatever name called) accrued or received under any scheme formulated by the Government, local authority or a corporation established under any law;
(vi) the amount of cash assistance, subsidy or grant, by whatever name called, received from any person for, or in connection with, the business other than to meet any portion of the cost of any business capital asset;
(vii) the amount of any remission, drawback or refund of any tax, duty or cess, received from the Government;
(viii) the amount of interest or remuneration (including salary, bonus and commission) accrued to, or received by, a participant of an unincorporated body;
(ix) any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy;
(x) the amount of profit on transfer of any business capital asset computed in accordance with the provisions of section 40;
(xi) any consideration accrued or received on account of slump sale;
(xii) the amount of any benefit accrued to, or received by, the person or the successor in business, if -
(a) it is by way of remission or cessation of any trading liability or statutory liability or it is in respect of any loss or expenditure; and
(b) the trading liability or statutory liability or loss or expenditure has been allowed as deduction in any financial year;
(xiii) the amount of reduction, remission or cessation of any liability by way of loan, deposit, advance or trade credit;
(xiv) the amount recovered from a trade debtor, to the extent determined under sub-sections (4) and (5);
(xv) the amount withdrawn from any special reserve created and maintained under any provision of this Code or the Income-tax Act, 1961, for which deduction has been allowed, if the amount is not utilised for the purpose and within the period specified therein;
(xvi) the amount accrued or received from his employees as their contribution to any fund for their welfare;
(xvii) the amount accrued or received on sale of any business capital asset used for scientific research and development;
(xviii) any income from a business, received after its discontinuance;
(xix) any consideration accrued or received in respect of transfer of any business capital asset self generated in the course of the business;
(xx) any amount accrued or received on account of the cessation, termination or forfeiture of any agreement entered in the course of the business;
(xxi) any amount accrued or received, whether as advance, security deposit or otherwise, from the long term leasing, or transfer of,-
(a) whole or part of any business asset; or
(b) any interest in any business asset;
(xxii) any amount accrued or received as reimbursement of any expenditure incurred;
(xxiii) any interest accrued to, or received by, a person being a permitted financial institution; and
(xxiv) any payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, if -
(a) the payment or aggregate of payments is in respect of any expenditure referred to in sub-section (1) of section 32;
(b) the expenditure is allowable as a deduction in any financial year;
(c) the payment or aggregate of payments exceeds a sum of-
(I) thirty thousand rupees if the payment is made for carriage of goods by road; and
(II) twenty thousand rupees in any other case;
(d) it has not been incurred in such cases and under such circumstances, as may be prescribed;
(xxv) any amount standing to the credit of the Fund referred to in section 75, if-
(a) income-tax has not been paid on such amount in any financial year preceding the relevant financial year; and
(b) the amount is shared during the relevant financial year, either wholly or in part, with a recognised stock exchange or recognised commodity exchange.
(3) The gross earnings from business shall not include the following, namely:-
(a) dividend;
(b) interest other than interest accrued to, or received by, a person being a permitted financial institution;
(c) income from letting of any house property owned by the person, other than income from letting of any house property in the course of running a hotel, convention centre or cold storage;
(d) income from the transfer of an investment asset;
(e) the reduction or remission of any liability by way of loan, deposit or advance received by a person, being an individual, from his relative.
(4) The amount of recovery from a trade debtor, referred to in clause (xiv) of subsection (1), shall be the amount determined in accordance with the formula-
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A - (B + C + D) |
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Where |
A |
= |
amount recovered from the debtor during the financial year; |
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B |
= |
amount of the debt outstanding in the account of the debtor at the beginning of the financial year; |
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|
C |
= |
amount of debt in respect of the debtor transferred to any other account and not allowed as a deduction in any financial year; |
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|
D |
= |
amount of debt added during the financial year in respect of such debtor; and |
(5) The amount referred to in sub-section (4) shall be nil if the amount 'A' in that subsection is less than the amount 'B + C + D' therein.
