One proprietor-- two different business -- tax audit

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Suraj (Querist)
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02 July 2012 My Query is as follows:

Mr. A is proprietor of business X and business Y. The nature of both businesses are different. During FY 2010-11, both were subject to Tax audit. In FY 2011-12, sale & purchase of Business X is Rs. 38 lacs and Rs. 30 lacs, whereas sale and purchase of Business Y is Rs. 1.09 cr and Rs. 85 lacs resp.

I wish to know whether Tax audit is applicable to both the businesses on the ground that the proprietor of both the businesses is one & the same and files one ITR. Or Tax audit is applicable for Business Y only?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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03 July 2012 In the case of an individual, the gross turnover of ALL the business carried on by him shall be aggregated for checking the applicability of Section 44AB.

However, for this purpose, business covered u/s 44AD shall NOT be considered.

Since Business X is an eligible business u/s 44AD, tax audit is not required if the assessee complies with Section 44AD.

Otherwise tax audit is required for both the business.

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