23 April 2009
Yes the limit is applicable and the audit is required be done u/s 44AB . Section 44AB does not define profession, however in section 194J the profession has been defined to mean profession being carried on by the person to whom the provisions of section 44AA apply. The profession of manpower consultancy services does not fall with in the meaning of section 44AA however the board in the circular no 715 at question no 28 has clarified that the provision for section 194J will apply to payment made to a recruitment agent. Thus the taking a lead from this it can be concluded that the Tax audit limit of Rs 10 lac should apply in this case. More over the term profession used in section 44AA is limited, while in section 44AB the term has been used in broader sense.
23 April 2009
Recruiting agents,probably cover manpower recruiting agents, are classified as persons engaged in doing 'BUSINESS' and not profession. Reference:-ICAI publication 'ISSUES ON TAX AUDIT' June 2000 edition Page 24. If viewed in that angle,unless turnover crossess Rs. 40 lakhs,tax audit is not aplicable.
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