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Income Tax

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This query is : Resolved

RITU DHWAJ (Querist)

12 March 2011 An assessee is having 5 Trucks and Receipt of Rs. 20 lacs in his bank a/c during the year FY 2009-10. Is sec 44AE applicalbe. Is sec 44AA applicable. Can both the section 44AA & 44AE be applicable in such cases?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

12 March 2011 He must have withdrawn the amount deposited from the bank a/c for the purpose of routine business expenses as and when required.

Section 44AA is not applicable where the assessee is showing his income under section 44AE.

Irrespective of his gross receipts, he has to calculate his income in accordance to Section 44AE.

But he must take care that the amount remaining in his bank a/c should be supportive to his income.

So care must be taken for withdrawals also so as to play safe.

Depreciation plays an important role in cash building up so considering depreciation, the amount may be kept deposited in Bank A/c.

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