audit requirment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 December 2009 Total turnover from trading business is 90 lacs which is audited and another contract receipt is 5 lacs for which tax is computed after appling section 44AD. Case in secrutiny. AO trying to impose penalty of non audit after taking into consideration the Contract receipts

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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14 December 2009 AO is not correct.

Deeming profits are applicable for contract receipts as per section 44AD.

See the tax audit report.

In Form 3CD; clause no. 10 -

The amount of profits has to be stated if for that income Section 44AD is applicable.

Since separate provisions are there for Section 44AD; hence for the purpose of Section 44AB; this amount of Rs.5.00 lac is not includible.

Ca Rakhecha,Surat

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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14 December 2009 if both the business are different (despite the owner being the same), then the AO cannot levy penalty on the same. As we can maintain different policies for different businesses. However, if the provisions of Sec.44AD are not applied to those receipts and separate set of books are maintained for them then they should be audited.

But as in your case, benefit of Section 44AD has been taken, there is no need to audit those receipts.

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Querist : Anonymous

Querist : Anonymous (Querist)

18 December 2009 Thank you