Regarding itr5

Page no : 2

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (195708 Points)
Replied 29 June 2018

Here, the profits declared under presumptive assessment is not required to be same as per actual figures, (though it can be in near about range).

So, you must not take the declared figures in your books, but maintain records as per general practice of accounting.

If at all you want to understand the scenario with the declared profit margin.......

[Your profits in the books would be the declared profit+depreciation amount. So, after adjustment of depreciation with fixed assets the net profit will be the same as declared profit.]

S ELAVARASI (ACCOUNTANT) (2975 Points)
Replied 29 June 2018

Thank You for the Reply Sir...

Sir.,
What my doubt is
If the value is 5lakhs. I opt 5 years u/s 44ad the FA value is 5lakhs? or what,?
if i go to 44àà after some year then wt is the value of the asset

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (195708 Points)
Replied 29 June 2018

No, it will not remain same. Every year its value will get reduced, as per depreciation rate applicable.

S ELAVARASI (ACCOUNTANT) (2975 Points)
Replied 29 June 2018

Okay thank you Sir...

I'll apply the depreciation and its not under p & l account then what is the accounting entry and wherr i transferred the depreciate amount.?

please give solution. its my long tiime doubt Sir

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (195708 Points)
Replied 29 June 2018

As I said earlier, when you are maintaining books (for your own records), you can debit the depriciation to P&L acc.

rama krishnan (12244 Points)
Replied 29 June 2018

Mr. dhiraj.. asking return question in lieu of a question can't be a valid answer. pls understand one thing, FAQs also made by the income tax authorities only. if you accept FAQs released by income tax authorities then you should accept my statement also because I'm also an income tax authorities. tomorrow they will remove the concerned faq and they will say we have not published such type of FAQs.
so in the interest of academic, it's necessary for us to get clarified doubts mutually. being income tax authority it doesn't mean that I should aware of everything at the same time being an chartered accountant it doesn't mean that you have answers for everything... I think you got what I mean to convey

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (195708 Points)
Replied 29 June 2018

Originally posted by : rama krishnan
	Mr. dhiraj.. asking return question in lieu of a question can't be a valid answer. pls understand one thing, FAQs also made by the income tax authorities only. if you accept FAQs released by income tax authorities then you should accept my statement also because I'm also an income tax authorities. tomorrow they will remove the concerned faq and they will say we have not published such type of FAQs. so in the interest of academic, it's necessary for us to get clarified doubts mutually. being income tax authority it doesn't mean that I should aware of everything at the same time being an chartered accountant it doesn't mean that you have answers for everything... I think you got what I mean to convey

I don't understand the meaning of such a query, when the department one day says something and the same department withdraws the faq and ask just the opposite.....

Whether the department is to trouble the innocent tax payers or to help them?

Does the department and its employees have no resposibilities towards the citizens, who actually feed them?

It is the well accepted fact that the presumptive assessment scheme was brought into the act to help small traders by reducing their hardship of maintaining record or books of accounts, provided they pay some percentage of their turnover as tax. Even if they earn that amount or not, but to get ride of the harrashment and pain of the scrutiny or other litigations. they adopt the minimum payment of tax.

Now a respected officer of the department argues about the basic concept of applicability of section 44AA, overiding sec. 44AD !!! (though knowing the fact that sec. 44AD overrides sec. 44AA & even sec. 44AB). Is it for academic interest of general public ???

What can one conclude???

What an argument, department can withdraw the FAQ and bring in act, without any notice????

My counter question is only to confirm the fact that what is pronouced by department, is not acceptable by its own officer !!! WHY???

2 Like

rama krishnan (12244 Points)
Replied 29 June 2018

I just asked you a simple question. where it's said that there's no requirement for maintaining books of accounts if the assessee opts for 44AD. if you can substantiate your statement, then do it with the relevant clause and provisions. instead why are you getting involved in unnecessary arguments. I don't want your lectures. pls substantiate your claim with the help of relevant provisions of section. I can show you millions of case laws which outlaws the statement in FAQs. so don't start your lectures again. if you can quote relevant clause, I'll be very grateful to you

RAJA P M ("Do the Right Thing...!!!") (128111 Points)
Replied 29 June 2018

@ Mr. Rama Rama Krishnan.,

Please go to read Advance Learning on Section 44AD (Theory) and What is the exact meaning of
- To give relief to small assessees, the Income-tax Law has incorporated a simple scheme
commonly known as Presumptive Taxation Scheme. There are two schemes, viz., the scheme
of section 44AD and the scheme of section 44AE. ****"An assessee adopting these provisions is not
required to maintain the regular books of account"*** and is also exempt from getting the books of account audited. In this advance learning we will cover the provisions of the presumptive
taxation scheme provided in section 44AD.

1 Like

rama krishnan (12244 Points)
Replied 29 June 2018

I understand your point Mr. raja... I raised above query purely on academic interest and not to misinterpret the same. first I was in a wrong impression and got clarification from Mr. dhiraj's reply. so I just asked him to provide him the relevant provisions so that I can make use of it.

RAJA P M ("Do the Right Thing...!!!") (128111 Points)
Replied 29 June 2018

Yes... Mr. Rama Krishnan.,

I agreed and Appreciate Your question and You want exact reply / clarification from Mr Dhirajlal Rambhia Sir....

But,
As per my view

What about the meaning of What is the exact of;

U/s 44AD (5) :

(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee to whom the provisions of sub-section (4) are applicable and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB."

"If not chargeable to income-tax shall be required toand other documents required as such books of accounts as per sec 44AA (2)"

So,
It's mean Asseessee can't file as per rule required books of accounts...
If he is filed then books of accounts Now required...

2 Like

rama krishnan (12244 Points)
Replied 29 June 2018

thanks for clarification Mr. raja... but still 44AA is ambiguous... because it uses (or) in between two clauses.. it means if any one of the clause is satisfied then the assessee is required to maintain books of accounts . this is what I understand...