Applicability of 44ab

This query is : Resolved

Shankar Rao (Querist)
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29 July 2011 Dear all

A partnership firm (retail trader) is having turnovr of of Rs.30,00,000 and net loss of Rs.150000 total income of Firm is Rs.-150000 (loss) Whether audit u/s 4AB is required ?
though profit declared is lessthan 8% on turnover Total income is not more than exemption limit hence i belive that audit u/s 44AB not required Kindly give your valuable opinion

Thanking you
yours faithfully

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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29 July 2011 The issue raised is squarely covered under section 44AD read with 44AB of the Income tax Act,1961. Since the partnership firm shows a loss, one of the conditions in section 44AD(5) is not satisfied and hence 44AB audit is not attracted.