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Tax audit u/s 44ab

pavan kumar (article) (103 Points)

16 September 2014

one of my client purchases has above 1crore and sales has rs.below 1crore.so in this case wheather tax audit will apply or not.plz reply

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16 Replies

Dixit (CA Final) (2405 Points)
Replied 16 September 2014

No in this case tax audit not applicable.

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Sakthi Baskaran (Chartered Accountant) (141 Points)
Replied 16 September 2014

Agree with Mr.Dixit.applicability of tax audit depends up on turnover (sales) and not purchase.

SATINDER PAL SINGH (PROPRIETOR) (33 Points)
Replied 16 September 2014

No need of tax Audit. However if the profit is less than 8% than Tax Audit will be applicable.

DIPTEN MITRA (ARTICLED CLERK) (35 Points)
Replied 16 September 2014

Depends on the constitution of the organization if its a company then no tax audit as mr dixit said if it is not a company then as mr singh said the 8% Rule will apply

ADV. KAPIL D BANGINWAR (ADVOCATE & TAX CONSULTANTS) (32 Points)
Replied 16 September 2014

If sales exceeds Rs. 1 Crore then tax audit is compulsory & not on purchase value

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ADV. KAPIL D BANGINWAR (ADVOCATE & TAX CONSULTANTS) (32 Points)
Replied 16 September 2014

If u have to show net profit of t.o. below 8% then Audit is compulsory.

Shubham Goyal (.) (35 Points)
Replied 16 September 2014

If purchase is greater than sale, it would be a loss situation. In this case section 44AD could be applicable

karan (articled assistent) (34 Points)
Replied 16 September 2014

for example profit is around 7% and assessee want to avoid tax audit to save on such audit expense then can he show his profit at 8% ?

ADV. KAPIL D BANGINWAR (ADVOCATE & TAX CONSULTANTS) (32 Points)
Replied 16 September 2014

Goyal Sir. U can file ur return u/s. 44 AD whatever the sale or pur. U have to show ur net profit @ 8% & not less than this.

ADV. KAPIL D BANGINWAR (ADVOCATE & TAX CONSULTANTS) (32 Points)
Replied 16 September 2014

Karanji. U can file ur IT Return as per sec 44 AD @ 8% net profit of the t.o. U have no need for Tax Audit when u show ur profit ratio @ 8 % or more than this.Simply u can show ur profit from 7 to 8 in ur case.

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Saurabh (None) (39 Points)
Replied 16 September 2014

Tax audit is manadatory if assessee is showing net profit below 8% u/s44AD. But if assessee is showing profit above 8% then Tax audit is not required.