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Tax audits

CA Krishna Chaitanya M (Chartered Accountant) (463 Points)

15 July 2013

How many tax audits a ca can do As per sec 44ad if income of assesse is below 8%, audit to be done While counting ceiling on number of audits Tax audits done as per sec 44ad are counted or not?

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Deepak Gupta (CA Student) (15922 Points)
Replied 15 July 2013

Originally posted by : chaitanya
	How many tax audits a ca can do As per sec 44ad if income of assesse is below 8%, audit to be done While counting ceiling on number of audits Tax audits done as per sec 44ad are counted or not?

Audits conducted u/s 44AD of the Income Tax Act, 1961 are not taken into account for the purpose of specified number (45) of Tax Audit assignments.
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Page 316 of Code of Ethics, 2009 (Chapter-6 of the Council General Guidelines, 2008 issued under clause (i) of Part II of the Second Schedule).

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rahul (CA) (83 Points)
Replied 15 July 2013

An assessee can opt for section 44AD only if he hasnt crossed the limit of turnover as per sec. 44AB which in other case requires tax audit.

in short a person opting for sec 44ad is not covered under tax audit. how come does the question arise

Dinakar C Korishettar (TRP) (42 Points)
Replied 19 July 2013

Dear Sir,

Assessee Details…

Status: Individual
Previous year (F.Y. 2011-12) there is a business loss. Tax Audit done as the business Turnover was more than Rs 60 Lakhs.
Other previous years income exceeds the maximum amount, which is not chargeable to income-tax and so tax audited.
For the Financial Year 2012-13 (A.Y. 2013-14) net profit (Rs 1,12,478 {1.32%}) is bellow maximum exemption limit and there is an agricultural income of Rs 9,58,498. And business Turnover (Rs 85,03,769) is less than 1 Crore.
He has been maintaining his books of accounts regularly.

Please guide…

Can any Tax Consultant or TRP file his ITR4, if it is not a Tax Audit case?
Which one is the last due date to file his return, if it is a Tax Audit case?

Please guide me whether his books of accounts have to be tax audited this year also or he can file his return without tax audit.

Because...

I am not clear about the clause inserted in Section 44 AB(d).

44AB. Every person,—

[(d) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,]

get his accounts of such previous year 67[***] audited by an accountant before the specified date

After reading this section some doubts will arise…

‘if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD’ what’s it’s meaning?
Whether every turnover bellow one crore is to be considered as said in section 44AD?
‘and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year’ what’s it’s meaning? Because ‘any previous year’ means whether n number of previous years or only one earlier previous year?
Is there any category like General Assessee, 44AB Assessee, 44 AD Assessee and so on?

Kindly clear my doubts.

Thanks with regards

Dinakar C Korishettar

email: dinakarkc @ hotmail.com

M: 9008549337.