25 August 2012
Dear Sir, One of my client whose turnover was 56 lacs in AY 2011-12 and opted sec. 44 AD by declaring net profit of Rs. 455000/-. Also in AY 2010-11 he did the same and maintained no accounts except bill book. However in AY 2012-13 his turnover is Rs 96 lacs, therefore he can not opt Section 44AD. If he holds the net profit @8% also this year, this would raise his tax liability upto 90000/-, therefore he decided to declare net profit @5%. Now please please advise me, what excuse can be taken if department cites the net profit rate of previous years.
27 August 2012
For Ay 2012-13 he has to maintain the books of accounts and get accounts audited if his net income is below 8%. Question may not arise as deemed income was declared u/s. 44AD but for AY 12-13 books are maintained and actual income is shown as per books maintained.
CAclubindia
