44 ad

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 May 2016 Dear Sir,

Pl suggest the following situations:-

In civil contract u/s. 44 AD & 44 AB one partner introduced CASH Rs. 50 lacs through CAPITAL ACCOUNT

-- Is it undisclosed income of the firm or
-- Can we take 8 % profit on Rs. 50 lacs cash receipts in Individual partners returns.

Thanks

CMA Nishad Patkar

CMA Nishad Patkar (Expert)
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09 May 2016 -It is not a undisclosed income provided respective partner will able to prove the source of such cash in his hand if assessment comes. Sec-68
- According to me, since Rs. 50 Lakh is not a revenue receipts, it can not be considered as Gross Receipt for computing profit or Income as per Section 44AD. Hence no need to show as a profit in individual partner's return.

Amol S Joglekar

Amol S Joglekar (Expert)
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10 May 2016 What are you talking? Are you suggesting the ALTERNATIVE scheme for the amnesty declared by Arun Jately?......

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CA SUNIL K GARG

CA SUNIL K GARG (Expert)
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10 May 2016 Capital introduced of Rs. 50 lacs is a capital receipt not revenue so it will not be a part of income either for firm nor in the hand of partner. Provided he has sufficient evidence to prove source of cash payment.

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2016 Thank you so much.

Safer side can I pay tax @ 8 % on Rs. 50 lacs i.e. Rs. 4 lacs of the partner.
pl suggest.

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
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10 May 2016 This will attract penalty of undisclosed income/concealment of income and penalty proceedings will be attracted.

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2016 Pl suggest how I proceed further. If I paid tax & filed return or filed return without showing the 50 Lacs cash receipts in his personal income tax return. Problems will arised. Is there are no any remedies for avoidance of any penalty. We will pay the tax as per rules.

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
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10 May 2016 sir , pls create source of addition rs 50 lacs by any means.

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Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2016 Ok thank you so much sir for your co-operation & prompt reply.