Whether liable for Tax Audit?

 

Mr. ABC has 3 shops – Shop A, Shop B and Shop C (all sole proprietorship concerns).
Shop A has sales turnover of Rs. 20 Lakhs
Shop B has sales turnover of Rs. 10 Lakhs
Shop C has sales turnover of Rs. 10 Lakhs
Total sales turnover of all the shops Rs. 40 lakhs but individually the sales turnover of each shop is less than Rs. 40 lakhs. Is Mr. ABC liable for Tax Audit?
Replies (3)

yes, Mr ABC liable to tax audit, as limit of Rs. 40 lakhs is per assessee and not per oulet or businessor per shop..

thus 44AB wud be applicable

Originally posted by :DMC
"  
Mr. ABC has 3 shops – Shop A, Shop B and Shop C (all sole proprietorship concerns).
Shop A has sales turnover of Rs. 20 Lakhs
Shop B has sales turnover of Rs. 10 Lakhs
Shop C has sales turnover of Rs. 10 Lakhs
Total sales turnover of all the shops Rs. 40 lakhs but individually the sales turnover of each shop is less than Rs. 40 lakhs. Is Mr. ABC liable for Tax Audit?
"

Hi,

As per section 44AF of income tax act, 1961, when a person has income less than Rs 40 Lakhs from retail business, then there is no requiremnets of compulsory tax audit under section 44AB.

Any assessee is liable to get compulsory audit in following cases of retail business

1. When its turnover exceed Rs 40 lakhs p.a

2. When Assessee's turnover is less than Rs 40 Lakhs p.a and assessee is claiming less than deemed income from the business as per section 44AF (5% of turnover).

 

Now, question whether turnover of all three retail is to be clubbed in calculation of turnover.

YES, turnover of all retails store will be included to compulsory tax audit because

1. It is income of an individual person (Owner is same)

2. All are retails business that are covered under section 44AF.

agreed with manish reply and this query is resolved now

 

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