44AB tax audit of 2 separate business by an assessee

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Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2010 one assessee who is an individual has two separate business 1st one being retail shop where his turnover is 37 lakhs and 2nd one being manufacturing concern where his turnover is 27 lakhs....
AS per the provisions of sec 44AB when the turnover in business exceeds 40 lakhs tax audit attracts....
As far as i see, the business is attracted to the provisions of sec 44AB and not the assesse. Based on this view the following are my querries....
Is the said assesse is liable to get his books of accounts audited under 44AB, as he is having 2 separate business which are not related to one another and individually turnover of each business is less than 40 lakhs?
Can the assesse go for the provisions of section 44AF for retail business, and show income without 44AB audit for the manufacturing business?
Please mention sitations if any....

Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2010 FD

PHANI

PHANI (Expert)
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03 June 2010 The provisions of Sec.44AB attracts to assessee and not business. The Section starts with "In case of any person" and "not in case of any business" Therefore, in case an assessee carries on two different business, the question of audit of accounts of the business arises only when the turnover of that business exceeds Rs.40lacs. Since the aggregate turnover of the businesses carried on by the assessee exceeds 40lacs, he should get his accounts audited.

The provisions of sec.44AF for the retail business i.e. paying tax on presumptive income can be used only in case the turnover of the retail business has not exceeded Rs.40lacs. Since the turnover of the retail business has not exceeded the prescribed limit, presumptive income approach can be used.

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kantijain

kantijain (Expert)
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03 June 2010 Dear ????,

Interesting question. Answers to ur question are available in guidance note on tax audit by ICAI.

Firstly the t/o specified u/s 44AB is assessee wise and not business-wise.

Secondly the t/o to be aggregated is t/o other than t/o of business opted under presumptive taxation.

Answer to ur queries are as follow:

Q1) Is the said assesse is liable to get his books of accounts audited under 44AB, as he is having 2 separate business which are not related to one another and individually turnover of each business is less than 40 lakhs?
Reply: Yes, the t/o of both the business needs to be aggregated.

Q2) Can the assesse go for the provisions of section 44AF for retail business, and show income without 44AB audit for the manufacturing business?

Reply: yes, the assessee can opt for presumptive tax u/s 44AF and also avoid tax audit for 2nd business.

For detailed analysis: refer Guidance note of ICAI on tax audits
Please mention sitations if any....

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Querist : Anonymous

Querist : Anonymous (Querist)

04 June 2010 h

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2010 Thanks all

Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2010 e

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