Regarding audit report u/s 44ab

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 August 2011 Dear experts, please clarify query regarding Tax Audit Report U/S 44AB.

Details of case are as below:
1.Mr. A engaged in 3 separate business and
proprietor of all of them.

2.Nature of business of all 3 are diff.

3.- Business 1 T/o is about 125 Lacs,
- Business 2 T/o is 25 Lacs &
- Business 3 T/o is 5 Lacs.

Query:
1. Does compulsory tax audit require for
business 2 & 3?

If not,can assesse opt for presumptive
taxation u/s 44AD for business 2 & 3?

2. Does combined audit report (B/S, P&L,
etc) require to prepared for all the 3
business?

* If yes, then how to prepared the 3CD
report?

* if not, then how the report should be
prepared for all the 3 business?

Thanks for sharing valuation suggestion and time.

CA Ashwani Agarwal

CA Ashwani Agarwal (Expert)
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21 August 2011 Limit u/s 44AB is person wise and not business wise. So because the total turnover is more than 60 lakhs, the client has to get the books of all the business audited.

CA Ashwani Agarwal

CA Ashwani Agarwal (Expert)
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21 August 2011 In my personal view Tax Audit is done business wise, so you have to get all the business audited seperately. Thats the practice we adopt.

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Querist : Anonymous

Querist : Anonymous (Querist)

21 August 2011 Please reply on all the matters asked in the query.

Still the query is open. Still in need of proper guidance.

thanks

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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21 August 2011 Query 1. Does compulsory tax audit require for
business 2 & 3? If not,can assesse opt for presumptive taxation u/s 44AD for business 2 & 3?
.

Reply-
1. 44AB(1) ... if his "total sales", "turnover"...... exceeds 60.00 lacs.

.

2. In this turnover , Turnover of Retail Business In the earlier Section 44AE,
was not included due to the old Sub Section (4) of Section 44AE, which had prescribed that Section 44AA & 44AB shall not apply on
1. Retail Business , and
2. in computing the monetary limit.

.

3. There is not such exclusion in Section 44AD.

.
4. Meaning there by,
a. 44AA and 44AB both will apply on the so .......called eligible business 2 & 3. and
...b. total turnover means T1+T2+T3 =125+25+5=155 ......lacs.
.
It clearly indicates that 44AD can not be opted for B2 and B3.
.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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21 August 2011 Q 2. Does combined audit report (B/S, P&L,
etc) require to prepared for all the 3
business?

* If yes, then how to prepared the 3CD
report?

* if not, then how the report should be
prepared for all the 3 business?

Reply-
Prepare 4th Balance Sheet P&L A/c and Capital Account of the Individual by consolidating B1,B2 and B3. The assessee is one and the same person.
.
In 3 CD report you give report on all
by writing against the remarks applicable as B1-............
B2-............
B3..............
Or Better Refer Schedule No. in the Main 3CD and Prepare relevant annexures firm wise.