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satish kumar Chauhan (Querist)
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17 August 2011 Everybody first of all thanks in advance for reply of my query

my qry is that my client is a mfr of wood furniture and the gross turn over during the previous year is 25.00 lac and received job work1.05 lac on account of furniture repair and making on the behalf of customers at customers places(all material supplied by customers)and received.55 lac as cash discount, spl discount under verrious sales promotional scheemes from companies,

in this case what amount will be minimum net profit U/S 44AD when the amount of job work & discount received are shown in P& L a/c as income.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 August 2011 If Discount received from suppliers of Rs 55000 is in the nature of trade discount it could have been deducted from purchase.
If possible it should be deducted by taking the net amount of purchases into consideration.
In case data presented for VAT shows gross Purchases and amount of cash deiscount is forming part of P&L Account in such a case it should be added as a gross receipts with 25+1.05=26.05 .
Assuming GR as 26.05+.55= 26.60, the assessee has to show 8% profit on GR of 26.05 lacs . Profit to be shown 2,08,400 or higher as per asessee's wish.

satish kumar Chauhan

satish kumar Chauhan (Querist)
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17 August 2011 Dear sir
trading & Profit & Loss a/c
Purchase 25.00 lac Sales 25.00 Lac
G.profit 5.00 Stock 5.00 lac

Exps 4.10 G.profit 5.00
NP 2.50 Discount 0.55
Labour 1.05

Pl. tell me above said data qualify U/s 44AD or not in case of mfr cocern

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