44 AD

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Astaf Mansuri (Querist)

08 June 2011 Dear ALL
i have 2 query

one, partnership firm having turnover of Rs.14 lakhs, and net loss of Rs.94000. whether it require to fall under 44AD? further if we add back partners capital interest & salary in that loss than resultant profit is Rs. 1450 in this case 44AD is applicable. i haven't find this kind of example in any book.

second, if proprietor fall under 44AD and get his accounts audited then which return is required to file ITR-4 or ITR 4S ?

please help me for the above quires .

thank you
Astaf Mansuri

Rakesh Jain

Rakesh Jain (Expert)

08 June 2011 Dear Astaf,

On a Partnership firm the provision of sec 44AD shall attract. whether it has profit or loss.

if you have calculated above loss after deduction of capital interest and salary according to provision of Income tax Act than it should be considered as exp and shall not be required to add back.

or in other language you can say profit and loss for the provision of section 44AD shall be as follows

Profit/loss before cap int and salary
less : cap int. and salary as per provision of income tax act
= Profit eligible for sec 44AD.

I have kept the problem open for the itr purpose.

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)

08 June 2011 1. IF U WANT TO GO FOR 44AD THEN INCOME WILL BE 8% OF 14LAKHS ELSE U WILL HAVE TO GO FOR AUDIT
2. IF THE ACCOUNTS ARE AUDITED THEN ITR-4
CA MANOJ GUPTA
JODHPUR
09828510543

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