Applicability of section 44ad(5)

This query is : Resolved

SREEVANI RAO (Querist)
Follow

11 August 2011 Respected Sir,

Please let me know whether 44AB tax audit is mandatory for manufacturing industry-rubber, whose status is: "Resident Partnership Firm" and whose turnover is Rs.56,99,855 and Profit is Rs.43,042 i.e.,0.755%.Since it is satisfying I condition viz., turnover is less than 60lakhs and profit is less than 8% for the AY 2011-12,I believe tax audit it is required,is it right? Kindly mail me to my mail id- sreevanisraor@gmail.com or gsgirish@vsnl.net as early as possible

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

11 August 2011 Manufacturing Rubber is covered under the eligible business.

For Partnership 8% of turnover is treated as income (456000) and from it Interest and remuneration to partners is allowed.
The balance is called the net profit.

So it is advisable to check the details
as per Section 44AD. Otherwise, get the accounts audited to avoid any litigation later.