Tax Audit

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CA Ysil Karunai (Querist)

19 June 2011 Dear Sir,
Mr. X and his Spouse is a Director of two Private Ltd Companies. Assume, the two companies are liable for Tax Audit during the year.
Query:
1. Whether the Tax Audit is applicable for Assessee wise or Business Wise?
2. Suppose the two companies are a proprietory concern, how the tax audit ceiling limit will be taken?

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)

20 June 2011 Tax audit limit is applicable assessee wise. If there are two business concerns having same proprietor than turnover of both concerns taken together will be considered for deciding whether tax audit is applicable or not.

If the turnover of both concerns exceeds Rs 60 lakhs or Rs 15 lakhs as the case may be, then both the concerns will come under tax audit irrespective of their turnover.

CA Rajendra Purohit

CA Rajendra Purohit (Expert)

20 June 2011 Company have his own distinct identity, so if company comes under tax audit then it is the company which is liable for tax audit and not the directors. So..

1. Whether the Tax Audit is applicable for Assessee wise or Business Wise?
Ans. It is always assessee wise. As per IT act, 1961 company is a person. So company wise you have to do tax audit.

For second question I agree with the expert for the above solution.

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