Originally posted by : Zulfikar Surti
	You couldn't understand my point. Maintenance of books has nothing to do with how much expense you incurred. What I want to say is if you decide income through some relevant documents, you have to clarify debit side of p&l also. And no one can decide 92% of expenses without relevant vouchers, irrespective of necessity to maintain books.

As someone already mentioned, why do you need to maintain any vouchers whatsoever? And if you do why would share them with AO? Most importantly, if you did that too, courts have ruled that AO can only make an assessment of gross receipts, not expenses or income.

By the way, why is 92% "expenses" raising your hackles?

Yes they do not have to maintain books of accounts. but their is difference between actully incurring and adjusting books. what we are suggesting is for your accuracy and be in it legally. Yes you my be right u/s 44AD but than their are other relevent provisions which you cannot justify that is why we have formed our opinion accordingly.

Their are difference profits as incurred at every industry and thats why we are concered about 92% expenses. you may escape once twice may be. eveything is being suggested for your good. We have our disclaimers for you not to act accordingly.

and while reading case laws, I also suggest you to read the entire case and verdict to sync the sintuation between your case and theirs.

Originally posted by : Rohit Tulshyan
	and while reading case laws, I also suggest you to read the entire case and verdict to sync the sintuation between your case and theirs.

I am a salaried person and don't have any business of any kind; I am trying to understand the concept of deemed income, that's all.

Can you throw some light at the some specific cases as well as other provisions.

I found the followng on my own 

(1) Shivani Constructions case 2008 - disallows 44AD because they maintained books of accounts (discovered by AO during a search); Assessee forced to pay more taxes Court seems to have held that if the books are maintained and then 44AD can't be availed.

(2) ITO vs. Mark Constructions 2012 - allowed 44AD even though audited books of accounts existed (though the Assessee refused to share those with the tax department); AO had sked for TDS deductions violations ITAT ruled against AO

(3) The above (2) relies on Surinder Pal Anad vs. CIT - 2010 High Court applied section 44AD and maintained that the assessee had no obligation to explain cash receipts unless there was no nexus to gross recepits

The case law seems to be rather weak in this specific case, though several CAs seem to claim they are disclosing 8% (and at the same time NOT showing the rest of the profits in Capital A/C - fishy to say the least)

Section 44 AD stipulates that assessee may declare higher income than %. The word used is "may", not "should". Therefore no question of tax evasion.

I wrote a long post; it is not showing up here for some reason.

Let me rewrite to final summary"

Dear Vinayak,                     If your income is higher than 8% than such higher amount shall be treated as your income i.e. 10 lakhs in your case. As per provisions, you have to show a minimum amount of 8% profits of gross receipts. Also, Please make sure other incomes i.e. other than business namely interest and other incomes shall be treated differently and cannot be included in 44AD receipts.                    I have no practical knowledge about 276C but I think in your case its not evasion since your are showing profits 10lacs. If you show 1.6 lacs than 1. Either your return will be treated Defective and to rectified. 2. Or you will receive a Demand Notice with your Assessement Intimation u/s 143(1).
 

Sir Can  a company declare 8%?? plz help