IF X IS CARRYING ON SMALL BUSINESS. TURNOVER IS RS 50 LAKHS. PROFIT AS PER HIS BOOKS OR CALCULATIONS IS RS 5 LAKHS. HOWEVER HE OPTS TO RETURN THE INCOME FROM SMALL BUSINESS AT THE SPECIFIED AMOUNT OF RS 4 LAKHS [ 8% OF RS 50 LAKHS ] PROCEEDS OF BUSINESS ARE DEPOSITED IN BANK.
NOW, IS THIS ALLOWED ????
CAN AO ADD IT AS INCOME ????
ACCORDING TO ME AS PER SEC 44 AD ASSEESSE HAS OPTION IN THIS REGARD AND ITO IS BOUND BY ASSEESSE'S OPTION IN THIS REGARD. BECAUSE HAD THE LAW INTENDED THE COMPULSION TO RETURN THE HIGHER AMOUNT IT WOULD HAVE EXPLICITLY PROVIDED AS IN SEC 44AE.
BUT BY NOT PROVIDING IT LEGISLATURE HAS CONFERRED A RIGHT ON THE ASSESSEE TO CLAIM THAT HE HAS EARNED A HIGHER AMOUNT BUT NOT AN OBLIGATION..
NOW I WANT U THE EXPERTS TO OPINE ON THIS DEBATABLE ISSUE !!!!!!!!
CAclubindia
