44AA read with 44AD

section 44AA(2) says if we carry on business or profession, we have to maintain all the books and records which enable A.O to compute *total income*.

44AD(5) says, if 44AD(4) applicable I.e. claiming profits below specified % and if total income exceeds BEL, then books specified under 44AA(2) shall be maintained and audit should be done.

for example, there is a person who has income from pgbp and capital gains in the same assessment year. And opted 44AD for pgbp and claimed cost of improvement of Rs. 9 lakhs incurred in F.y 2001-2002.

Now my doubt is, if A.O asks documents or proofs for such COI in scrutiny. Can we say we are not required to maintain books or any documents which enable A.O to compute *total income* as per section 44AA(2) r.w 44AD.

reasoning:

section 44AA mandated a person carrying on business or profession to maintain all the records from which we can arrive at total income and not only income from business. in the same way, if he opted section 44AD, he is exempted from maintaining all the records as specified under 44AA. so, in my case, my total income represents profits from business and capital gains. following above analogy. if I opted 44AD, I need not to maintain the records or accounts relating to my total income and it is not limited to income from pgbp.....

share me your view...
Replies (1)

The view is not acceptable. The presumptive assessment is only for income under head PGBP. For all other income/investment, books may not be required to be maintained, but bills need to be produce for proof of COA or COI.

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