Tax audit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2017 DEAR SIR,

MY CLIENT IS A BUILDER (PARTNERSHIP FIRM) THEY HAVE STARTED CONSTRUCTION OF A COMPLEX IN 2015-16 BUT THEY HAVE ONLY PAID EXPENSES NOT SALE ANY PROPERTY SO THE EXCESS AMOUNT OF LOSS WE HAVE CARRIED FORWARD TO NEXT YEAR 2016-17. BUT IN YEAR 2016-17 THEY HAVE SALE SOME SHOPS BUT THEN ALSO AT THE YEAR END THEY CAN'T SET OFF ALL LOSS DUE TO NON SALE OF PROPERTY.
MY QUESTION IS THAT DO I CAN SHOW LOSS AFTER SET OFF PROFIT OF THE F.Y. 2016-17 ??
DO I NEED TO GO FOR TAX AUDIT IF I DON'T SHOW GROSS RECEIPT U/S 44AD @ 8 AND PAY TAX @32% AS A PARTNERSHIP FIRM TAX...???

KINDLY HELP.

THANKS IN ADVANCE

ABHISHEK GARG

ABHISHEK GARG (Expert)
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17 August 2017 No tax Audit Not required because as per 44AD
(1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an
eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross
receipts of the assessee in the previous year on account of such business or, as the case may be, a sum
higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be
the profits and gains of such business chargeable to tax under the head "Profits and gains of business or
profession"

Profit for the previous year must be 8% or more of the Turnover or Gross receipts of the Previous year for availing exemption from tax audit.
You must show profits @ 8% or higher for the currrent year and then set off your previous year losses.
And Carry Forward the Balance Unadjusted Loss.