31 July 2011
In my view, as per Section 44AD(5) your firm would not require to get its account audited provided the net loss of Rs 100000 is- before providing partners interest and remuneration.
31 July 2011
I do not agree with Mr. Bafna. As the section provides minimum profit @8%. In your case if the loss is after providing Interest and Salary to partner and the profit before providing is 8% of Gross turnover then it is out of tax audit otherwise you have to get the accounts audited.
31 July 2011
The provision of section 44AD(5) can be interpreted in the following manner- I request the expert to suggest a better interpretation to help us all-
PART A. 5) " Notwithstanding anything contained in the foregoing provisions of this section, "
FORGET ALL WHICH HAVE BEEN SAID IN THIS SECTION IN THE PROVISIONS OF SS1 TO SS4 OF THIS SECTION.
PART B an eligible assessee who claims that his profits and gains from the eligible business as lower than the profits and gains specified in sub-section (1) and . IT IS TALKING ABOUT PROFITS LESSER THAN 8%. IT MEANS PROFIT LESS THAN 8% WILL BE CONSIDERED FOR TAXATION PURPOSE .
PART C whose total income exceeds the maximum amount which is not chargeable to income-tax, AND TAXABLE INCOME IS REQUIRED
PART D shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section.
SUCH PERSONS ARE REQUIRED TO GET THEIR BOOKS OF ACCOUNT AUDITED.
IT CAN BE INTERPRETED THAT IN CASES WHERE TOTAL INCOME IS BELOW THE TAXABLE LIMIT, THERE IS NO REQUIREMENT OF AUDIT, EVEN IF THE PROFIT SHOWN IS LESS THAN THE REQUIRED 8% (OF TURNOVER OR GROSS RECEIPTS).
01 August 2011
Thankyou Mr. Bafna for such a nice interpretation.
its very clear from your interpretation that if assesse claims less than 8% profit he needs to get its account audited only if his Taxable income is above exemption limit.
CAclubindia
