Audit

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ejaz naiyer (Querist)

07 May 2012 Sir,

My one friend is in the business of development of software. He develops and export it out of India. So, there is no service tax. I am fileing his return for the last three years.

In A.Y. 2009-10 his loss was rs 9 Lakh (Approx) and turnover Rs 30 Lakh.
In A.Y. 2010-11 there was also loss of approx Rs 5 Lakh.
Both the return was filed on date.

But in A.Y. 2011-12. there is change in Section 44 AD which provides for mininmum 8 % income to be shown for any business (other than plying of truck.). Now i am confused if there is requirement of Audit for the A.Y. 2011-12.
So, Please help me. And I want to know whether for the last two years tax audit was also required.

If possible reply in my mail id ejaznaiyer@gmail.com.

I also got lots of help from you people in the past.

Regards
Ejaz Naiyer

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)

07 May 2012 Audit is required for the A.Y. 2011-2012. Before that, Section 44AF was not very clear with regards to all businesses. It only spoke of retail business. So you can take a stand for earlier years. But for A.Y. 2011-2012 onwards, in case of loss making businesses you have to get the books of accounts audited.

prateek aanchalia

prateek aanchalia (Expert)

07 May 2012 agree with above reply.,
but in the previous year u get benefit of return filing under section 44AF than u require to show profit Minimun 8% of trunover..but u file loss return under this section than u require to audit of books of a/c.. because under section 44AF if u show income below 8% of trunover than u require to books of a/c audited..
but u file return..so now u pray no query raise by income tax dept. against that return file..

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)

07 May 2012 In earlier years, Section 44AF didnt talk of any business other than retail business. So the business of software export was not covered under that. But Section 44AD includes the business w.e.f. F.Y. 2010-2011. So no need to get the books of accounts audited for any earlier year.

ejaz naiyer

ejaz naiyer (Querist)

08 May 2012 Thanks to all for great support.

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