Is he liable for tax audit?

Dear Members,

My client who is a Builder & Developer has sold some Flats in a housing project but he is still debiting Bank a/c and crediting the customer & all the expenses are debiting  in the WIP A/c i.e. no Trading & P&L a/c.and not booking any profit. He explain that as I am eligible to take benifit of Sec 80IB i.e. 100% expention then I will book the whole profit in last year i.e. in future.

Is his statement is correct? If not than on which basis he is liable to tax audit?

Thanks in advance..

Replies (1)

hI!

As per explanation to Sec 80IB(10) deduction shall not apply to any undertaking which executes their housing project as a works contract awarded by any person including Central govt. or State govt.. This is to ensure that the deduction is granted only for the owner who is investing for the project and not for the contractors.

Normally he is liable for tax audit if his turn over exceeds 40 lacs for the AY 2010-11. If he doent maintains the books he can be assessed under 44AD

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