Deemed profit for partnership firm

In A.Y. 2015-16, a partnership firm has filed ITR-4 (maintaining books) with NP, Salary to partners and Interest on Capital amounting to 12%. Now for A.Y. 2016-17, firms can show deemed profit of 8% or more (by filing ITR-4s) and also claim interest on capital and salary to partners from it. Now is it advisable to show deemed profit restricted to 8% and claim interest on capital and salary from it, for A.Y. 2016-17. All this keeping in view that from A.Y. 2017-18, this deemed profit of 8% will exclude interest on capital and salary to partners. Can IT Department, raise this objection of showing less net profit margin i.e. @ 8% in A.Y. 2016-17, while it was 12% net profit margin in A.Y. 2015-16, when books were maintained?

Replies (2)

YES IT DEPARTMENT RAISE OBJECTION OF SHOWING LESS NET PROFIT 

The question of any objection doesn't arise, because it is as per allowable limits of 8% u/s. 44AD!!!

More over there are case laws in favour of assessees, for non sustaining the objection because of no books of accounts to be maintained!!

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