Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Sec. 44AF

Naina (CA Student) (477 Points)

04 February 2009

Do an assessee has to get his books of accounts audited if his retail sales are less than 40 lakhs and the net profit is below 5% of gross receipts?

Reply
Follow
Share

4 Replies

CA. Ashok shah (CHARTERED ACCOUNTANT) (333 Points)
Replied 04 February 2009

Yes, the assessee is required to maintain Books of accounts and get the accounts audited u/s.44AB in respect of retail business income u/s.44AF, if assessee claims that profits and gains from the said retail business is less than the profits and gains deemed to be his income u/s.44AF (i.e. Less than 5% of the gross receipts from retail business with turnover not exceeding Rs.40.00 lacs). In other words, Profit and gains of such retail business shall be presumptively computed @ 5% of gross receipt or as the case may be, a sum higher than the aforesaid sum as may be declared by the assessee in his ROI. Otherwise, audit u/s.44AB is compulsory.

Upgrade to CAclubindia Pro. Subscribe Now!

(Guest)

Originally posted by :CA. ASHOK SHAH
"	Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} Yes, the assessee is required to maintain Books of accounts and get the accounts audited u/s.44AB in respect of retail business income u/s.44AF, if assessee claims that profits and gains from the said retail business is less than the profits and gains deemed to be his income u/s.44AF (i.e. Less than 5% of the gross receipts from retail business with turnover not exceeding Rs.40.00 lacs). In other words, Profit and gains of such retail business shall be presumptively computed @ 5% of gross receipt or as the case may be, a sum higher than the aforesaid sum as may be declared by the assessee in his ROI. Otherwise, audit u/s.44AB is compulsory.	"

Yes Ashok sir is right

Naina (CA Student) (477 Points)
Replied 05 February 2009

Sir,

So is it right that a retailer cannot show net profit below 5% of its gross receipts, without getting the books audited, even if gross receipts is well below Rs. 40 lakhs.