Sec44AD V/s P.G.B.P. provisions

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Ankit (Querist)
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28 June 2011 An assessee(individual) deal in manufacturing of spare
parts of machinery and has turnover just above 40 lacs with Net profit less than 8%.He maintains all the records/ books of accounts. He is never been assessed under presumptive taxation i.e. u/s 44AD/AE/AF earlier.

Now as per Sec 44AB, he is not required to get his a/c audited but with the reading of Sec 44AD he is required to get his a/c audited as his net profit is less than 8% as specified by Sec 44AD.

Now from point of LAW, what should be right course
1) assessee file ITR without audit & with net profit less than 8%( as normally done)

2)either he has to get a/c audited or declare income/pay taxes as per Sec44AD i.e. at 8%( comply with Sec 44AD)

If the right action be point no:2, then does it seems that there is burden on assessee to get his a/c audited in every case( whether turnover less than 60 lac or more)
or
declare net profit at 8% or more (as per Sec 44AD,even if he does want to opt for presumptive income)

Thanks

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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29 June 2011 If you are claiming the income u/s 44AD then the profit should be 8%. If it is less then 8% you should get the accounts audited and then file the return.

Rajeev Garg

Rajeev Garg (Expert)
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29 June 2011 this is only the way.

Ankit

Ankit (Querist)
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29 June 2011 Sir
but the problem is that while filing ITR through software(not of I. Tax Department),
software forces for auditing info or profit more than 8%, while assessee is not opting for sec44AD. He just want to file ITR by complying normal provisions of PGBP

and i want to know what would be right action among the two options mentioned in my first query?

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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30 June 2011 u will have to go for audit and file ITR-4 if u want to declare less than 8 percent as profit

CA MANOJ GUPTA
JODHPUR
09828510543
gm2104@gmail.com

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