Credits in savings bank account under 44ad

check with bank what is the credit transfer for. also check who had deposited cash in the bank. bank must be having the foil regards the deposit

Ok one of them is from a friend but both friend and assesse don't remember about them as they are flatmates and the cash deposit is from his personal savings(money saved from allowance from parents)

What should be done here do the assesse need to explain them under 44AD?

what if the A,O disallow them?

would it be better to just them to total income to avoid any future problem?

if they are able to explain the source and purpose to the satisfaction of AO then AO won't disallow.else 100% sum wud be disallowed. so better to add, if source and purpose not traceable

What could be an appropiate response to satisfy A.O

you shud be able to proove that it was used for business purpose and opposite party was

But it was not for business purpose both the credits were for personal purpose as they were roommates and the assesse is under 44AD.

then it will be surely disallowed

Then what should be done here are the assesse was operating from Savings account and has debited and credited for personal purpose too

you can route it through the capital account of proprietor.since income is calculated under presumptive basis so it is taken as a percentage of your turnover. so it's quite possible that the case might not come up for scrutiny. but try to avoid such practice and whatever personal exp are there route them through capital account as drawings

Can you explain what is capital account

I talked with a CA and he is telling that we should consider it as a capital introduction. is it correct 

capital account is the proprietor's personal account shown in the business in which only transaction's of personal nature of proprietor such as household expenses, leisure trip exp with family , medical insurance premium, children's school fees and such other expenses not related to business of the assessee is shown in the capital account.
also suppose if the proprietor is falling Short of money in his business bank account to meet business expenses then he can bring his own money and introduce it in the business by way of capital introduction

The assesse only has 1 bank account that is saving accounts he has the P&L statement and the turnover from income.

The only problem i am currently facing is that there are some credits in savings account which are not related to business and are personal. like money from parents, money from friends 

 

@ Mr Giridhar S Karandikar.,

Why/What are the compliants about the Assessee will be File "U/S 44AD"...?

Why You are without considering the sec 44AD in this query...?

Please explain Your views...!

even if assessee is following presumptive accounting the AO will definitely ask for books of accounts if he has to raise any doubts. so it's better to maintain clean accounts in order to avoid any future hardship