Sec 44ad

This query is : Open

Ca Siddharth Mehta (Querist)
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11 February 2012 Assessee is engaged in Clearing and forwarding business which mainly include reimbursement of freight, C&F expenses and agency charges. gross receipt in his bank account is more than 1.5cr Rs.(during A.Y.2011-12) due to reimbursement of various expenses however in 26AS its amounting to Rs. 70 lakhs as client is deducting TDS on reimbursement charges also.
Actual turnover of agency charges is only 55 lakhs including profit on reimbursement charges.
1.Whether assessee can opt for Presumptive Taxation(44AD) since actual turnover is less than 60 lakhs? OR
2.we have to do Audit u/s 44AB (Due date has passed for audit)? OR
3.we can file return without doing audit showing gross turnover as 55lakhs.

Kindly Help on the above matter.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 February 2012 In the given circumstances, it is better to manage this issue with Tax Audit as prima facie gross turnover, here, includes all the receipts including the reimbursements. Without incurring such expenditure (on behalf of the client) you could not clear the assignment given to you. The only difference in your charges and expenditure being reimbursed is that, you are not adding your profit margin in the later part of your receipt.
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Ca Siddharth Mehta

Ca Siddharth Mehta (Querist)
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11 February 2012 However Assessee has not deducted TDS on Expenses incurred by him. so will this all expenses will be disallowed?

Give supporting since assessee is not interested in getting his account audited.

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