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

TAX AUDIT U/S 44AD

08 October 2018

If a partnership firm has book profit which is 5% of Turnover and net loss in profit & Profit Appropriation Account. Turnover is 40,00,000/-.
Is it liable for Tax audit..?

Reply
Follow
Share

7 Replies

RAJA P M ("Do the Right Thing...!!!") (127962 Points)
Replied 08 October 2018

Please read this Forum....

https://www.caclubindia.com/Forum/details.asp?mod_id=432606

Upgrade to CAclubindia Pro. Subscribe Now!

aradhana upadhyay (151 Points)
Replied 09 October 2018

Yes, under section 44AD(4) and (5)

Samrat Karar (110 Points)
Replied 09 October 2018

If it will be book loss then also audit needed?

aradhana upadhyay (151 Points)
Replied 09 October 2018

Loss also means less than 8% or 6% profit of turnover

RAJA P M ("Do the Right Thing...!!!") (127962 Points)
Replied 09 October 2018

Originally posted by : Samrat Karar
	If it will be book loss then also audit needed?

(a partnership firm has book profit which is 5% of Turnover) as You said the 5% will be shown u/s 44AD then audit is applicable based on less than priscribed limit of profit...

Also sec 44AD says "No need books of accounts" then what you mean Book profit...? it's not reasonable.

Better to ask with details...

Upgrade to CAclubindia Pro. Subscribe Now!

RAJA P M ("Do the Right Thing...!!!") (127962 Points)
Replied 09 October 2018

Better to read the following :

Sec 44AD (5) :

(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee to whom the provisions of sub-section (4) are applicable 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.]