Notice u/s 139 (9) error 86

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Raj Godhwani (Querist)
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20 October 2017 I have received a notice from IT department for having filed defective return for AY 2017-18. The notice says: Error Code 86
As per Section 44AD(6) of the Income Tax Act, 1961, the provisions of Sec.44AD are not applicable to – (1) persons carrying on professions that are referred to in Sec.44AA(1), (2) persons earning income in the nature of commission or brokerage, and (3) persons carrying on any agency business.As seen from the return of income filed, the nature of business code mentioned is 00301 General commission Agents, which falls in the categories mentioned above. Hence, the provisions of Sec.44AD are not applicable, in your case.

Possible resolution: As the provisions of Section 44AD are not applicable, in your case, the claim of computing profits and gains of business on presumptive basis, under this special provision is not allowable. Hence, the above defect has to be corrected by way of computing the profits and gains of business under the normal provisions and not under Sec.44AD and offering the same.

I am a Contractor so I put 0505-Contractors-Others & 0301-General Commission Agents
And I got Defective return Error 86 due to 301-General commission Agents.
Now I want to remove 301-General commission Agents as I have no Income under this nature, actually I left commission work 3years back after that to till date I have no income from this.
As I have file ITR4 for Assmnt year 17-18
and also shows income of 6% of gross receipt as digital transaction income.
NOW I could not able to change to itr3 as if I file itr3 than I have to do audit of business.
Please help and suggest what should I do.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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21 October 2017 Reason being that you fill code as commission agent. If you have commission income you cant opt for income u/s Sec 44AD. Correct your return by filling it in ITR-3......

Manian

Manian (Expert)
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21 October 2017 Log in Income tax efiling portal. Choose the link e-file and Response to notice u/s.139(9) and agree for the error and upload corrected (that is removing 301 and retaining 505) ITR-4 in XML format and submit.

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Raj Godhwani

Raj Godhwani (Querist)
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21 October 2017 Thanks Manian Sir, I had done the same.
Thank You.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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21 October 2017 But again same notice received as you are doing same mistake again. You have to file ITR-3 in place of ITR-4.

Manian

Manian (Expert)
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21 October 2017 There is no mistake. You did not have income under Agency Commission, then there is no point in classifying income under Agency Commission. It is only by mistake you have classified income under Agency Commission. Mistakes can be corrected at any point of time. If there is notice again then we can make reply for the same.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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21 October 2017 Okkkk agreed with you Manian. Read query wrongly.....

Raj Godhwani

Raj Godhwani (Querist)
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24 October 2017 Thank You once again both Manian Sir and Rashmi mam for giving your Precious time to understand my problem and solve my queries.
Thank you...

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CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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24 October 2017 Welcome Raj Godhwani.....

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