07 February 2017
sir,
I filed it return of my client in ITR 4. EMPLOYER of my assesse was detected tds u/s 194j . sir filed return itr 4 professional income .and climed refund because they have no taxable income. but m not filed balance sheet . I filled only the p&l recipe amount sale of service head . because they worked in a company & no taxable income so feeled there is no need for balance sheet. but now I received notice u/s 139. what can I do ? is any need for balance sheet ? because they have no investments
08 February 2017
An assessee other than specified profession u/s 44AA is required to maintain books of account if its net business & profession income exceeds Rs. 1,20,000 or gross receipt/sales exceed Rs. 10,00,000/-. In your case, it seems that the gross receipt is less than 10,00,000/- but net income from business and profession exceeds Rs. 1,20,000/-.
so, in your case, you need to respond to the notice received u/s 139 and file balance sheet and profit and loss account.
08 February 2017
Section 194J refers to payment of fees for professional or technical services. In your case, the assessee is not an employee on paper. The employer has considered his service as a consultant or professional fees and not as a salary to employee. In this case, the nature of transaction falls under the head business and profession and not under the head salary. So, you need to prepare income and expenditure account and balance sheet based on all the details and records available with you or supplied by your assessee. If no investment is there simple capital account and assets to be shown in balance sheet.
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