Audit Case

This query is : Resolved

Hanmantu N.Sai (Querist)
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28 October 2009 Hi Everybody,

I want to know if i am builder & i have received advances against flat booking, but still work is in progress, there is no sale of flats or no possesssion given to any flat holder.

Then in this case if all the expenses including land, labour & indirect exp. exceeds Rs.40/- lacs then is it consider as audit under section 44AB.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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29 October 2009 The issue is covered under AS-7 (Accounting for construction contracts). Therefore income is to be recognized on percentage of completion method mentioned in the As-7. If income recognized ,as above ,exceeds Rs.40/- per annum Section 44AB of The Income tax Act,1961 applies.