26 July 2013
I have queries related to Audit under section 44 AB and it goes like this:
The assessee is a proprietorship concern engaged in software development and has earned revenue of Rs 34 lacs during F.Y. 2012-13. My Questions are:
1. Whether the activity of software development is a business or profession?
2. Should we also read section 44 AA along with Section 44 AB to determine whether it is business or profession? Section 194 J also talks about specified profession and it includes information technology . But section 44 AB is silent on this.
3.And if it is a profession it is liable to audit for A.Y. 2013-14 As it crosses Rs 25 lac
26 July 2013
if the concern is developing the software and selling it the it comes under business head and for that you need to check whether rs 1 cr was earned from gross turnover.
if concern is just developing on customer direction and not selling it independently then its providing ser of devloping then it will be under profession and rs 25 lkhs will replace rs 1 crore above.
194J is applicable when the concern is providing techicnal services.
since earned revenue is 34 laks sec 44AA in any case is applicable and need to maintain boks of a/c.
26 July 2013
Yes, Mr. Salil, observation in Para 3 is relevant and the professional is liable for Tax Audit. . For your reference I am quoting the Notification U/s 44AA :
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