Profit under Section 44AD/ADA

Yes... The account fall under Tax Audit u/s 44AB. If fall under Tax Audit then Books of Accounts required as per sec 44AA...

Actually, the case is like actual profit is 60% but under Sec 44AD if he reports 15%. what would be consequences at assessment?

No more restriction as per act...
He can show 8 percent or above 8 percent if he is eligible presumptive taxation scheme...
Otherwise no need to worry about the Profit value as per Your query.

Actually, the case is like actual profit is 60% but under Sec 44AD if he reports 15%. what would be consequences at assessment?

in the assessment the balance 45% of the turn over will be charged to income tax and in addition penalty u/s. 270A of the act will levied

No...
No...
No...

No more penalties levied. As per sec 44AD assesee can show profit just 8 percentage of his profit is earned above 8percentage or more even if it's 50 percentage or 70 percentage...

Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession" :

when the assessee is unable to determine his profit due to non maintenance of books, the legislature gives a leverage by allowing him to declare 8% of turn over as his total income. when the assessee able to determine his profit and Even then if he declares less profit by declaring 8% when actually his profit percentage more than that, then it tantamount to concealment and fit case for levying penalty.

for academic interest, let us consider, if the intent of the legislature is to make assessees declare only 8% of turn over, then there's no requirement for the "or clause". the government intent is that you maintain books or not, at least declare 8% of your turn over as income to avoid tax audit as even if the actual profit is less than that. but when the actual profit is more than 8% then the assessee is obliged to declare the same

Originally posted by : rama krishnan
	Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession" :when the assessee is unable to determine his profit due to non maintenance of books, the legislature gives a leverage by allowing him to declare 8% of turn over as his total income. when the assessee able to determine his profit and Even then if he declares less profit by declaring 8% when actually his profit percentage more than that, then it tantamount to concealment and fit case for levying penalty. for academic interest, let us consider, if the intent of the legislature is to make assessees declare only 8% of turn over, then there's no requirement for the "or clause". the government intent is that you maintain books or not, at least declare 8% of your turn over as income to avoid tax audit as even if the actual profit is less than that. but when the actual profit is more than 8% then the assessee is obliged to declare the same

As already discussed many many times ... No further additions can be made by the A.O ones the assesse opts "Special scheme of presumptive taxation under sec 44AD".... its not you or me who interprets/defines a law , its the judiciary which interprets the law and in context of 44AD its already well settled in law that " The minimum prescribed rate of percent (OR higher as claimed by the assesse) is the final net profit percentage on which the assesse is liable to pay the income tax " ...interestingly in very recent judgment the Delhi ITAT used very strong words when an assesse assessed under sec 44AD was questioned by the IT department on basis of his past year profit percentage declarations ... below I produced a part of the judgment rest full case law you can refer directly at  https://indiankanoon.org/doc/151903937

"I also find that the argument that in the earlier year the assessee has shown a higher net profit rate by itself is also not an argument which would justify the denial of the statutory play of sec. 44AD in the peculiar facts and circumstances of the present case. In the absence of anything on record apart from the past history of the assessee itself and the return filed in the subsequent assessment year, wherein the assessee may have remained ignorant about the applicability of sec. 44AD. I find the departmental actions for denying  statutory benefit in the peculiar facts of the present case need to be strongly repelled and cannot be sustained in law. It may not be out of place to expect that some training and guidelines are prescribed to re-orient the adjudicating authorities with their role and functions to be performed. It cannot be ignored or allowed to be forgotten that the State exists for its citizens. The Tax Administrtion must necessasrily ensure that only just and due taxes for the State are always collected. However, the collection shall be in accordance with law and not based on the ignorance of the taxpayers but on the facts of the case. The taxpayers must, by positive actions of the Tax Administration be assisted and guided towards tax compliances and the tax administration should be strongly discouraged from achieving targets based on the ignorances of the taxpayers. The statutory benefits, if available under law to the taxpayer must be addressed fairly."

EDIT : The last post got posted twice ...