Can an eligible assesssee carrying on eligible business whose turnover exceed Rs. 1 crore but less than Rs. 2 crores and has satisfied both the condition of the provision to sec 44AB(a), declare profit less than 6% /8% as required under sec 44AD(1) and av
Can an eligible assesssee carrying on eligible business whose turnover exceed Rs. 1 crore but less than Rs. 2 crores and has satisfied both the condition of the provision to sec 44AB(a), declare profit less than 6% /8% as required under sec 44AD(1) and avoid provisions of both sec 44AB(a) and sec 44AD(1).
As per proviso sec 44AB (a) in case of a person whose
(a) aggregate of all amount received including amount received for sales/turnover/gross receipts during the previous year, in cash, does not exceed 5% of said amount and
(b) aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed 5% of said payment,
then for the purpose of clause (a) of sec 44 AB, limit is Rs. 5 Cr instead of Rs. 1 Cr. So if the above conditions in proviso is satisfied, audit is not required if turnover exceed Rs. 1 Cr but less than Rs. 2 Cr.
Regarding applicability of sec 44AD (1), the section can be adopted by eligible assessee carrying on eligible business.
As perexplanation b(ii) to sec 44AD eligible business means turnover/gross receipts does not exceed Rs. 2 Cr. But sec 44AD is not withstanding only to sec 28 to 43 C and does not over ride sec 44AB. Further sec 44AB is applicable to every person falling in clause (a) to (e) of sec 44AB and shall apply relating sec 44AD only if that person fall in sec 44AB (e) ie; asessee to whom sec 44AD (4) apply.
Also as per provision to sec 44AB, it is clear that this section shall not apply if profit declared u/s. 44AD (1) and turnover does not exceed Rs. 2 Cr. So if profit is not declared U/s. 44AD (1), then sec 44AB ought to have applied. But sec 44AB also will not apply on account of proviso (a) to sec 44AB. Hence in this case sec 44ABand 44AD (1) both are not applicable.