we have a partnership firm which is doing agriculture plantation( ie, plantation in tea). We are selling the tea leaves to a tea manufacturer. since the Activities are Agriculture in nature Income of the firm is exempted from income tax as per section(10) of the Income tax Act.During the year 2006-07 the Total Sale of tea leaves exceeds Rs. 40 lakhs. Now please clarify (i)whether the firm is liable for tax Audit U/s 44AB of the Income tax act? (ii) whether the firm is liable to file the Income tax return during the period
19 February 2008
Section 44AB is applicable only where the assessee's Sales or Gross receipts are from the business or profession as defined in the Act. Business or profession does not include agricultural income exempt from Income tax.
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