Net profit above 8% but scrutiny notice received
This query is : Resolved
07 January 2015
We are partnership firm and our business is property developers.We purchase land and residential flat construction on the land and sale the flat.In F.Y 2011-2012 our flat sales is RS. 15,00,000/- our net profit is rs. 144000/- is paid as remuneration to partner.so we think that 8% of Rs. 15,00,000/- is rs. 120000/- but our profit is rs. 144000/- so our profit is more than 8% but we received scrutiny notice u/s. 143(2) by the income tax department.As per income tax law net profit is more than 8% so there is no need to scrutiny.we want to know that the notice is valid or not valid as per law.
07 January 2015
The notice is valid. The scrutiny may be on your turnover. During scrutiny if you prove your turnover is right no question can be asked on profit as it is more than 8%.
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