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Real estate

CA rafiq (ca) (129 Points)

31 July 2011

hi.. i have a client who doing land developing. last year (31/3/2011) his gross receipts were rs. 2crore. whether tax audit under sec.44ab is compulsory? and till date no sale deed made so income not recognised. is correct procedure or we have to recognise some amount?

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C.A SHASHANK GOYAL (Chartered Accountant) (362 Points)
Replied 01 August 2011

Hi, Plz Clarify which method of accounting is followed by your client , because i am of the opinion that since words of the law says that " sales ,gross turnover or gross receipts as the case may be " it mean that if we are following the accrual basis then you must have not recognised as sales and therfore no need to carry out tax audit and if you follow cash basis then also you might not to go for audit because receipt you have done must have been treated as advance and not sales .