02 February 2008
sir, An individual has a gross turnover from Wholesale trading of Rs39 laks .he is in receipt of Rs 25000 as interest on bank deposits and Rs 80000 as commission for arranging Real estate transactions. The total of all the above comes to just above Rs 40 lakhs- is it liable to Audit u/s 44 AB ? and also clarify whether the law is very clear on this point I believe that it makes a lot of difference if the trading activity can be said to be RETAIL as it falls u/s 44AF.
Thank you for the solution -in this case supposing that the interest received is from personal investments such as ordinary bank deposits, the total turnover will be the sum total of 39 lakhs amd Rs 80000 (commission) - in which case there is no requirement of 44 AB audit - will you please confirm
02 February 2008
If gross turnover or receipts from business(es) of the person is more than 40 lacs , 44AB is applicable.......business means all the business of the person.
Now, here the real issue is wether his bank interst is receipt of business.IT DEPENDS ON FACTS OF THE CASE......IF THE DEPOSIT WITH BANK HAS BEEN MADE IN COURSE OF CARRYING ON OF BUSINESS , IT IS HIS BUSINESS RECEIPTS OR IF IT IS IN HIS INDIVIUAL BALANCE SHEET AS INVESTMENT ONLY NOT RELATED TO BUSINESS OR INCIDENTAL TO CARRYING ON OF BUSNINESS IT IS INCOME FROM OTHER SOURCES...........NOT PART OF BUSINESS
The sale of goods or commodities in small quantities directly to consumers IS RETAILING
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