44 ad
This query is : Resolved
19 April 2017
Assessee has a total turnover of 50 lakhs from his trading business. He opts for 44AD and files the return for 4 lakhs as Incem and pays the tax accordingly.
His margin in this particular business is more than 25 percent. Hence he purchases a property for Rs 12 lakhs.
Now, how can he explain it to the IT officials at the time of scrutiny or in the future whenever necessary , the source for purchase of property as the retun ncome is only 4 lakhs. He doesnt maintain proper books of accounts as it is not neccessary
His margin in this particular business is more than 25 percent. Hence he purchases a property for Rs 12 lakhs.
Now, how can he explain it to the IT officials at the time of scrutiny or in the future whenever necessary , the source for purchase of property as the retun ncome is only 4 lakhs. He doesnt maintain proper books of accounts as it is not neccessary
19 April 2017
This is a case of Escaped Income, you should pay proper tax if you know your margin as you can declare higher income u/s 44AD
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CA R SEETHARAMAN
(Expert)
19 April 2017
In such a case books of accounts need to be maintained to prove the source or to be proved through bank transaction details.
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CA R SEETHARAMAN
(Expert)
19 April 2017
It is not an escaped income option is given to the assessee to declare 8% Income inspite of earning more income.
Nikhil Kaushik
(Expert)
19 April 2017
there is no need to maintain books of accounts (once you do that, you cannot claim 44AD!)
all you need to do is to show the bank statement that establishes the gross revenue and shows that the money for the property was paid out of the bank account itself. No need to worry about what the taxable income was.
all you need to do is to show the bank statement that establishes the gross revenue and shows that the money for the property was paid out of the bank account itself. No need to worry about what the taxable income was.
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