08 October 2016
Dear Experts, A partnership firm having loss in AY 2016-17 however turnover is also below 1 crore please let me know weather the firm need to get audit u/s 44AB or not
08 October 2016
Sub Section (1) of section 44AD reads as follows:
(1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”.
Sub section (5) of section 44AD reads as follows:
(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.
By Simultaneous Reading Sub section (1) and (5) following points are to be considered
1. The profit and gain of the assessee in eligible business is 8% or More than he do not require to get books of account audited under section 44AD read with section 44AB 2. If the Profit claimed is less than 8% of total turnover or gross receipt and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and get them audited under section 44AB here both the conditions are fulfilled because the word used in section is "and" if any one is not satisfy than no need to get the books of account audited and in case of "loss" the total income does not exceeds the maximum amount which is chargeable to income-tax so no need to get the books of accounts audited. Thanks.
CAclubindia
