44 ad
This query is : Resolved
Ajay Mishra
(Expert)
24 August 2013
Hi
Professionals are not covered under the presumptive scheme of section 44AD that was very much clear from the definition of eligible business as the word specially business was mentioned therein and business cannot include professions.
However, whether agency business or income from commission was covered under presumptive scheme under section 44AD or not, it was not clear from the wording of section 44AD and definition of eligible business contained in the explanation to the said section as word business has only been mentioned in the definition of eligible business and agency business could have been interpreted as business by any rational person.
Therefore there must have been certain cases where the assessees carrying on some agency business or earning income from commission may have filed their return of income under the presumptive income scheme of section 44AD. In such cases if such assessee’s(carrying on agency business or earning income from commission) turnover or income exceeds the limits prescribed u/s 44AA then such assessee would be required to maintain regular books of accounts and he should have filed his return of income as per balance sheet and books of accounts.
Therefore such assessee should revise his return of income and file his return in accordance with his books of account and balance sheet, as such assessee carrying on agency business is not covered u/s 44AD.
Professionals are not covered under the presumptive scheme of section 44AD that was very much clear from the definition of eligible business as the word specially business was mentioned therein and business cannot include professions.
However, whether agency business or income from commission was covered under presumptive scheme under section 44AD or not, it was not clear from the wording of section 44AD and definition of eligible business contained in the explanation to the said section as word business has only been mentioned in the definition of eligible business and agency business could have been interpreted as business by any rational person.
Therefore there must have been certain cases where the assessees carrying on some agency business or earning income from commission may have filed their return of income under the presumptive income scheme of section 44AD. In such cases if such assessee’s(carrying on agency business or earning income from commission) turnover or income exceeds the limits prescribed u/s 44AA then such assessee would be required to maintain regular books of accounts and he should have filed his return of income as per balance sheet and books of accounts.
Therefore such assessee should revise his return of income and file his return in accordance with his books of account and balance sheet, as such assessee carrying on agency business is not covered u/s 44AD.
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