Audit u/ sec. 44ab

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Querist : Anonymous

Querist : Anonymous (Querist)

08 April 2013 One of my client has a purchase exceeding Rs. 1 crore but sales is around Rs. 80 lakhs for a.y. 2013-14, is he liable for tax audit?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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08 April 2013 No, since tax audit is linked to 'sales turnover'.

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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08 April 2013 For the above case tax audit doesn't apply. Because of tax audit applicability linked to gross turnover(sales). As per the section 44AB if the gross turnover of the assessee for A.Y 2013-14 exceeds Rs.1 crore then he should be make tax audit of their books compulsory.

So in your case gross turnover for A.Y 2013-14 is Rs. 80 lakhs i.e below One crore (i.e below the limit prescribed u/s 44AB) so tax audit is not mandatory for your case. But due to the following reasons tax audit may be applicable.

In your case tax audit is not mandatory so the assessee is liable to offer their income as per section 44AD i.e minimum of 8% profit on gross sales as profit from business thus required to offer business income of Rs.6,40,000.

If the assessee want to offer lower income than income prescribed above then he should be required to maintain regular books of accounts as per section 44AA and if his gross total income exceeds basic exemption limit then required to make tax audit u/s 44AB.

So simple and in one word for your case tax audit is not mandatory but if the assessee offering lowering income than section 44AD and his gross total income exceeds basic exemption limit then tax audit is required and compulsory.

By simple we can say for your case tax audit not required but at the option of the assessee it may be require.

OM SAI SRI SAI JAI JAI SAI

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