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Under section 44 AD......

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Rajat Sharma

Accountant

647 Points Posted on 14 November 2022

Sir with due respect I want to know that I have filed return under section 44 AD now the case of the assessee has been fixed for secrutiny for the asstt year 2018-19 and the e faceless assessing authority has been asked me to furnish the Balance sheet profit and loss account audit report.can the assessing authority required to furnish the same whether the assessee has been filed his return under section 44 AD.Thanks

Replies (6)

Quick Summary

This discussion addresses queries regarding income filed under Section 44AD and subsequent scrutiny by tax authorities. It clarifies that individuals opting for Section 44AD, provided they meet the conditions, are generally not required to maintain detailed books of accounts like balance sheets and P&L statements. The conversation also touches upon potential ambiguities, the implications of declaring profit higher than the presumptive rate, and whether AOs can still raise queries despite legal provisions.

Manoj BG

Tax Professional and in Service

1795 Points Posted on 14 November 2022

Person declaring income u/s 44AD not required to maintain books of accounts and hence, asking financial statements for the same is beyond the operation of section 44AD. Draft suitable reply in consultation with CA to avoid any litigation point.

Regards,

Manoj

Ankit Neema

38 Points Posted on 14 November 2022

There is also a case law, I think the same can also be refer

UrbanCap

Promoter

28 Points Posted on 22 February 2023

I think there is still some ambiguity here.

Can we file under Section 44, if we meet the criteria and if as such the profit is higher than 8%.

Do we still need to keep accounts to show the same?

CA Sorav Gupta

Chartered Accountant

1005 Points Posted on 22 February 2023

Just draft a reply to intimate the AO that you have declared PGBP income u/s 44 AD & you are not liable to maintain the books of accounts prescribed u/s 44 AA provided that you have complied with all the conditions lied down under section 44 AD.

In case of any further queries, kindly mail me at casoravgupta @ gmail.com

Thanks & Regards
CA. Sorav Gupta
(Practicing Chartered Accountant)

CA Sorav Gupta

Chartered Accountant

1005 Points Posted on 22 February 2023

UrbanCap

Promoter

28 Points Posted on 22 February 2023

Thanks so much Sorav.

I think the confusion is usually that if one decides to operate an entity under Section 44, then do I need to maintain any accounts?

If my profit is above 8%, can I deem it to be 8% as per the law

If its a partnership, does the taxation happen at the partnership level and profit post tax remains tax free in the income statement of the respective partners (even if the partners are firms)

Can AOs still harass despite some court orders stating about section 44