06 July 2012
Hello Experts, My query is, There is a p'ship firm who is in the business of Construction of Residential Complexes. This firm is following Percentage Completion Method. Also this firm has not booked any Sales yet, so there is no Turnover. Further it has received Advance Receipts From Customers which is around Rs 5 crores. The project is still under construction. So whether this firm is liable to gets it books of accounts audited u/s 44AB of Income Tax Act?? please reply asap its urgent.
07 July 2012
Every person,— (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds sixty lakh rupees in previous year then require to be audited u/s 44AB
09 July 2012
Dear Sourabh Sir, then whether just advance receipt from customers where there is no total sales or turnover ,will attract sec 44AB? is advance receipt from customers comes under Gross receipts?
09 July 2012
It will be noted that the provision relating to tax audit applies to every person carrying on business, if his total sales, turnover or gross receipts in business exceed Rs.60 Lacs(or 1crore) However, the term "sales", "turnover" or "gross receipts" are not defined in the Act, and therefore the meaning of the aforesaid terms has to be considered for the applicability of the section. since in your case it is no sales but there is receipts therefor meaning of Gross receipts has to be considered and it will include all receipts whether in cash or in kind arising from carrying on of the business which will normally be assessable as business income under the Act. so as per the provisions it is applicable you can also refer to other experts for further details.
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