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Query relating to Tax audit

Gautam Patel (CA and CWA) (146 Points)

21 August 2008

Whether interest on partners capital received by partner will form part of turnover as specified by section 44 AB (tax audit) in respect of his individual assessment. If yes,then please specify the reference for the definition of turnover as per Sec 44 AB ?

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4 Replies

Satyendra sahu (service) (216 Points)
Replied 21 August 2008

Hi Goutam,

Please refer sec 44AB, which specifies total sale, turnover or gross receipt in business for the previous year.

Here the intention is receipt of business not the payment made by business.

Interest paid to partner over their capital, how you can link these two things. One is income of business and other is expenditure.

I request you to read the provisions clearly and with open mind.

(Guest)

Originally posted by :Gautam J Patel
"	Whether interest on partners capital received by partner will form part of turnover as specified by section 44 AB (tax audit) in respect of his individual assessment. If yes,then please specify the reference for the definition of turnover as per Sec 44 AB ?	"

Yes Mr. Gautam patel, Interest recd by Partners from firm, is considered as Turnover u/s 44AB. Refer Section 28(v) for clarity of Business Income