Para 1 YK & Associates is a reputable firm of Chartered Accountants, with its headquarters situated in the vibrant city of Jaipur, Rajasthan.…

Para 1 YK & Associates is a reputable firm of Chartered Accountants, with its headquarters situated in the vibrant city of Jaipur, Rajasthan. Founded by CA. Yashdeep and CA. Karan, the firm has established itself as a trusted entity in the field of accounting and financial consultancy within the region. Led by the expertise and vision of its partners, YK & Associates offers a comprehensive range of professional services tailored to meet the diverse needs of its clients. From auditing and taxation to financial advisory and compliance, the firm prides itself on delivering reliable solutions that drive business success. With a deep understanding of both local regulations and global market dynamics, YK & Associates serves a diverse clientele spanning across industries such as manufacturing, hospitality, retail, and more. Whether assisting startups in navigating regulatory frameworks or providing strategic insights to established enterprises, the firm's commitment to excellence remains unwavering. Beyond its professional endeavour, YK & Associates actively engages in initiatives aimed at contributing to the local community and promoting financial literacy. Through seminars, workshops, and pro bono services, the firm strives to empower individuals and businesses with the knowledge needed to make informed financial decisions. Para 2 YK & Associates get their website developed as www.YKassociates.com from Adarsh Tech Ltd. The colour of their website was very bright and attractive to run on a “push” technology. Names of the partners of the firm and the major clients were also displayed on the web-site without any disclosure obligation from any regulator. Para 3 In exchange of consideration of developing website by Adarsh Tech Ltd., CA. Yashdeep, accepted appointment as its tax auditor for A.Y. 2024-25 and commenced the tax audit within four days of appointment since the client was in hurry to file Return of Income before the due date. However, before signing the tax audit report, he sent a registered post letter to the previous auditor and obtained the postal acknowledgement. Para 4 Adarsh Tech Ltd. duly filed its income tax return for the Assessment Year (AY) 2024-25 duly on September 30th, 2024. The Income Tax Department processed the return and sent an intimation to Adarsh Tech Ltd., indicating that no immediate issues were found. Despite the intimation, the return was selected for regular assessment. Para 5 Jaipur Municipal Corporation (JMC) had invited online bids for development of online cloud system, for maintaining some vital statistics including registration of births and deaths, within the pre-defined period as per the contract. The work involved composite supply of goods and services wherein the supply of services was the principal supply. The value of goods (in form of computer hardwares) constituted 25% of the total value of composite supply. Mr. Arsh, Managing Director of Adarsh Tech Ltd., located and registered under GST in Jaipur, wanted to bid for the same. Para 6 Mr. Arsh wanted investment advisory services from YK& Associates for investing the surplus funds of Adarsh Tech Ltd. for which purpose he had invited Mr. Yashdeep for a meeting. In the meeting, Mr. Yashdeep explained the benefits of investing in mutual fund schemes along with its drawbacks and also recommended investing in Scheme Purnarth floated by HMKD Plus Mutual Fund managed by his own friend. The details of such scheme are as follows: HMKD Plus Mutual Fund had the following assets in Scheme Purnarth at the close of business on 31st March, 2024. Company No. of Shares Market Price Per Share Nepathya Ltd. 25000 20 D-Con Ltd. 35000 300 Sarpan Ltd. 29000 380 Care Health Ltd. 40000 500 The total number of units of Scheme Purnarth are 12 lakhs. The Scheme Purnarth has accrued expenses of 1,50,000 and other liabilities of 3,00,000. Para 7 Further, Mr. Yashdeep, in his busy schedule, took some time to attend one another meeting, this time arranged by manager of RFIN Bank, Mr. Ravi, who wanted Mr. Yash's firm to perform an audit of the blockchain-based system, the details of which are provided by Mr. Ravi to Mr. Yashdeep, in the said meeting, as follows: Bouyanc Bank, headquartered in Chicago, offers a broad range of financial services including asset management, commercial banking, investment banking, and treasury and securities services. RFIN Bank in partnership with Bouyanc Bank, provides a comprehensive range of banking services and products encompassing retail banking, corporate banking, international banking, and other financial services. RFIN Bank has been significant contributors to the digitalization of banking services in India. Under the pilot programme, the Indian bank will open on-chain Nostro accounts with Bouyanc Bank branch in Gift City. The blockchain-based system is expected to facilitate instant, 24×7 settlement between the accounts held at the US bank. Essentially, it will create a private intra-correspondent banking network, redefining the traditional banking hours and enabling seamless money transfer. Para 8 Mr. Ravi, the manager of RFIN Bank, gave an order on 1st January, 2024 for 1,000 custom-made corporate gifts to be provided to their prestigious corporate clients along with the information about the aforesaid blockchain-based system to GM Stores Pvt. Ltd. (GMSPL), the financial statements of which are audited by YK & Associates. On 3rd January, 2024, GMSPL purchased raw materials to be consumed in the production process for 6,50,000, including - 50,000 refundable purchase taxes. The purchase price was funded by raising a loan of 6,55,000 (including - 5,000 loan-raising fees). The loan is secured by the inventories. During January, 2024, GMSPL designed the corporate gifts for the customer bank. Design costs included: cost of external designer = 6,000; andlabour = 4,000. During February, 2024, GMSPL's production team developed the manufacturing technique and made further modifications necessary to bring the inventories to the conditions specified in the agreement. The following costs were incurred in the testing phase: materials, net of 3,000 recovered from the sale of the scrapped output = 21,000labour = 11,000depreciation of plant used to perform the modifications = 5,000 During February, 2024, GMSPL incurred the following additional costs in manufacturing the customised corporate gifts: consumable stores = 55,000labour = 65,000depreciation of plant used to manufacture the customised corporate gifts = 15,000 The customised corporate gifts were ready for supply on 1st March, 2024. No abnormal wastage occurred in the development and manufacture of the corporate gifts. The accountant head of GMSPL took assistance of CA Karan for computing the inventory cost involved in the aforesaid supply at the time of routine audit conducted by CA Karan.