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Proprietor firm taxation


Vedanta Deshika

2014-02-02

Dear friends,

One of my clients has to ge a refund of a lumpsump amount for AY 2012-13. He is in a proprietorship busines, turnover for the FY 11-12 has exceeded 60lakhs. Now, the client wants to file the return to claim the refund.

What would you recommend??

1. Whether he can go for tax audit now ( since for AY 2012-13 , tax audit limit was 60 lakhs). What are the things as an auditor , we have to do for filing ITR , Form 3cb, 3cd etc. ??

2. Can he adjust his turnover to below the 60 lakhs and apply section 44AD and proceed further.

Kindly advice

Mukesh Jain CA

2014-02-02

He can file the return & claim refund however penalty of 0.5% of turnover may be levied by the department. However if you can prove that the books were not ready then this penalty will not be levied. There are various case laws on this subject & the reasons for non filing of ITR needs to be analysed on case to case basis.

He cannot adjust his turnover below 60 lakh, since he would have filed vat returns.

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Vedanta Deshika

2014-02-02

Thanks mukhesh for your valuable suggestion

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CA Pulkit Sharma

2014-02-02

The points to be taken care are:

  1. Penalty may be levied, non-maintainance of books will not be accepted by officer. Its already 3 years passed since the due date of filing the tax audit.
  2. Turnover can not be adjusted as mukesh said VAT returns are already filed.
  3. What you can do is do the tax audit and file the returns. He may not be penalised since online submission was not applicable than.
  4. Officer will get only the ITR in his servers.

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