44ad --> books required if more than 8% ?

This query is : Resolved

CA Kunjan - www.canaresh.com (Querist)
Follow

08 April 2016 if assessee having small business and has t/over less than 1 crore and he shows more than 8% of profit, then books are required?

my view --> books are required just to enable AO to compute income (as per 44aa)
contrary view --> 44aa states that books are required if profit is less than 8%. Hence, its not required to maintain books.

so are books required or not for those who show more than 8%?

regards, ca kunjan, 9222922292

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
Follow

08 April 2016 Sec 44AA is with respect to professional income, if you Cross above 25 Lakhs. You need to maintain books of accounts prescribed u/s 44AA.

IF it is income of nature is of business of dealer/ contractor, If Gross Turnover is Less than one crore. Than you think can declare minimum 8% of gross Turnover. There is no ceiling for maximum %.

Message likes : 1 times

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

08 April 2016 Income Tax Act is NOT the end OR ultimatum of our life.
According to me, as has been taught to us in the beautiful subject of Accountancy that the books of accounts are kept to know "where the business stand"
Whether or not Income tax says something about keeping the books does NOT mean that the businessman should follow the same. In fact, a prudent businessman will always keep the books of accounts.
To me, the provision is so simple and to mean, SO FAR AS INCOME TAX ACT is concerned, if the profit is shown above 8% in case of eligible business, Income Tax Dept will NOT ask for your books. (It does not say that businessman should NOT keep the books of accounts)
Your views please.

Message likes : 1 times

Upgrade to CAclubindia Pro. Subscribe Now!

CA Kunjan - www.canaresh.com

CA Kunjan - www.canaresh.com (Querist)
Follow

10 April 2016 i feel books as would enable ao to compute income shoudl be maintained as per 44aa even if profit is more than 8%.
regards, ca kunjan

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

11 April 2016 yes. And as per 44AD, income tax department will NOT ask for the same.

CA Kunjan - www.canaresh.com

CA Kunjan - www.canaresh.com (Querist)
Follow

15 April 2016 someone has written nice article not exactly on books but on 44ad --> https://www.caclubindia.com/articles/section-44ad-of-the-income-tax-act-after-budget-16--26672.asp