CA. BIJENDER KR. BANSAL (ACA, B.COM) (8148 Points)
12 August 2010
|
X is a sole proprietor. F.y 09-10= Turnover 45 lakh F.y 08-09= Turnover 39 Lakh F.y 07-08= Turnover 50 lakh He has paid a royalty of Rs 35,000/- to a company on march 25, 2009 without deducted TDS.
Question is
Tax audit u/s 44AB is applicable in this case in FY 2009-10 & Disallowance U/s 40(a)(ia) is applicable in the case or not?
|
|
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 12 August 2010
TDS provisions in case of an individual is applicable if the individual is liable for audit u/s 44AB in the previous year. In the given case the assessee is not liable for audit u/s 44AB in F. Y. 2008 - 09 and hence TDS provisions are not applicable in F. Y. 2009 - 10. Hence exepense not disallwoable u/s 44AB.
CMA. CS. Sanjay Gupta
("PROUD TO BE AN INDIAN")
(114225 Points)
Replied 12 August 2010
Agree with Aditya Ji. Disallowance Not applicable since tax audit is not applicable in Fy 2008-09.
CA. BIJENDER KR. BANSAL
(ACA, B.COM)
(8148 Points)
Replied 12 August 2010
Tax audit will be applicable in FY 2008-09 becasue in last previous year 2007-08 turnover is more than 40 lacs.
Tax audit will not be applicable in FY 2009-10 even if its turnover exceeds Rs. 40 lac because previous year 2008-09 turnover is below 40 lacs.
Whether i am right sir ?????????????
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 12 August 2010
For tax audit u/s 44AB the turnover of the year is to be seen and if turnover for the financial year exceeds Rs. 40 lakhs that year is liable for audit not the next year.
Previous year tax audit applicability is to be seen only in case of applicability of liability to deduct TDS and not for tax audit.
SO ur second post is wrong.
| Originally posted by : Aditya Maheshwari | ||
 |
TDS provisions in case of an individual is applicable if the individual is liable for audit u/s 44AB in the previous year. In the given case the assessee is not liable for audit u/s 44AB in F. Y. 2008 - 09 and hence TDS provisions are not applicable in F. Y. 2009 - 10. Hence exepense not disallwoable u/s 44AB. |
 |
Bhavin Bhadra
(Job)
(174 Points)
Replied 12 August 2010
Dear all,
For tax audit applicability limit of Rs. 40Lakh turnover is to be considered so Tax audit will be applicable in the F.Y. 2007-08 and F.Y. 2009-10.
TDS Provisions in case of propreitor are applicable only if there is tax audit or last year tax audit had been applicable. Therefore, in this case Royalty payment of Rs. 35000/- will be subject to TDS provisions.
ajithasai
(m.ajitha)
(95 Points)
Replied 13 August 2010
hi
TDS provisions in case of an individual is applicable if the individual is liable for audit u/s 44AB in the previous year
thank you
regards,
phe9oxis,
CA SURENDRA KUMAR RAKHECHA
(Practising CA at Surat)
(26263 Points)
Replied 13 August 2010
Agree with CA Aditya's reply.
Hai..............
Good morning............
Welcome to this forum.....
The fifth revised edition of the Guidance Note on Tax Audit under section 44AB of the Income-tax Act, 1961 incorporates all the amendments made till date including those made by the Finance Act, 2005. It also explains the requirements of the newly introduced Statement of Particulars to be annexed to Form 3CD. The portion relating to appendices have been revised and enlarged extensively to make the Guidance Note a fully comprehensive document on tax audit.
HIGHLIGHTS OF THE FIFTH REVISED EDITION
1. Detailed guidance for determining turnover in the case of transactions in shares and securities.
2. More examples added to illustrate gross receipts.
3. Principles enshrined in a number of Auditing and Assurance Standards incorporated.
4. List of Accounting Standards updated.
5. Applicability of Accounting Standards to Small and Medium Level Enterprises explained.
6. Form NO.3CD – Significant additions.
Clause Additions
8 Reference to the Part B of the new annexure to Form No.3CD in regard to nature of business.
9 Amendments in Rule 6F incorporated
13 Thoroughly updated
14 Portion relating to adjustment of actual cost of plant and machinery for the purposes of claiming depreciation under the Income-tax Act in respect of CENVAT Credit claimed and allowed under the Central Excise Act, - revised.
New section 43A inserted by the Finance Act, 2002 – Legal position at variance with AS 11 – Tax Auditor’s duty explained.
Mandatory depreciation and additional depreciation – Tax Auditor’s duty explained.
17(f) Implications of the new section 40(a)(ia) in regard to inadmissible expenses like interest, commission or brokerage fees for professional services etc. where tax has not been deducted at source or after having been deducted has not been remitted to the Government – explained.
Tax auditor’s duty in respect of STT explained.
21 Significance of amendments made by Finance Acts, 2001 and 2003 explained.
27 Tax auditor’s duty vis-à-vis TDS and E-TDS explained.
New annexure to Form No.3CD Detailed guidance to the members.
Price of the publication 250.
Arrangements will be made to despatch copies to all the Regions/Branches immediately on receipt of the copies.
Have a nice day......
Thank you for sharing with us.....
regards ,
phe9oxis.
CA Atul
(Tax Manager)
(294 Points)
Replied 13 August 2010
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8311 Points)
Replied 15 August 2010
Attached File : 1_230announ1178.pdf downloaded 1 times
Pankaj Gulati
(Tax Advisor)
(81 Points)
Replied 15 August 2010
the royalty was paid in fy 8-9 and the TO in fy 8-9 was 39 lac, hence this individual (i.e. prop) was not falling within the provisions of section 44AB. Thus royalty paid is an allowable expense even if no TDS was deducted on it.
CAclubindia
