Applicability of tax audit

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Querist : Anonymous

Querist : Anonymous (Querist)

03 October 2014 Dear Experts,

I have a query related aaplicability of tax audit, kindly answer
Assessee is a paertnership firm and engaged in the business of event management, during the financial year2013-2014, firm has gross receipts of Rs. 72 lakh and net profit before partner salary is above 8% ( limit specified in sec 44AD ) but after partner salary net profit reduced to 3 %. so kindly advice whether tax audit is applicable or not.

Nikhil Kaushik

Nikhil Kaushik (Expert)

03 October 2014 no...tax audit wont be applicable in this case....

Querist : Anonymous

Querist : Anonymous (Querist)

03 October 2014 Mr. Nikhil can you please explain, why tax audit is not applicable. Assesee have net profit below 8% and section 44AD is overiding section which states that if the assessee have turnover below 1 crore and his income cross the minimum taxable limit and have N.P below the percentage in 44AD is required to maintain books of accounts and audit need to be done for the same.

Nikhil Kaushik

Nikhil Kaushik (Expert)

03 October 2014 because the profit to be considered here is the profit before salary...

Querist : Anonymous

Querist : Anonymous (Querist)

04 October 2014 Thanx alot Mr. Nikhil, can u please provide me the section or any case law where it is mentioned. i will be very thankful to you

Nikhil Kaushik

Nikhil Kaushik (Expert)

05 October 2014 section 44AD itself says so....