09 June 2011
MY CLIENT IS A RATION AS WELL AS NON-RATION DEALER. HIS TOTAL TURNOVER DOES NOT EXCEED 60 LAKHS FOR A.Y.2011-12. HIS RATION SALES IS APPROX 40% OF TOTAL TURNOVER. IS HE LIABLE FOR AUDIT U/S 44AB IF HIS NET PROFIT MARGIN IS LESS THAN 8%? ALSO WILL HE BE COVERED UNDER 44AD?
09 June 2011
If the turnover does not exceed 60 lakhs he falls under section 44AD, but if profit is less than 8% of turnover than he has to get his accounts audited under section 44AB provided his total income exceeds minimum liable to tax.
He will be lible for penalty of a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less.(U/s 271B.)
This is because Sec 44AD direct assesse to provision of Sec 44AB for the purpose of Audit. It means the provision of Sec 44AB shall apply and conseauence of this the assessee shall be lible for a PENALTY U/S 271B.
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