Presumption income scheme u/s 44ad

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2012 sir
A transport owns 8 heavy vehicle and another 10 vehicle take on hire form other vehicle owners.
he use the above vehicle to provide transportation service to many kind of business houses and as consideration including loading and uploading he get cartage on km or weight basis or on fix contract basis.
his estimated receipts for the financial year is Rs. 58 Lacs
can he offer the above turnover for tax under sec.44 AD

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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08 September 2012 Sir, First your case comes under section 44AE not under section 44AD.
So know we have to analyis is you offer income as per section 44AE or should be done tax audit as per section 44AD.

First i am here re-producing section 44AE.

As per section 44AE an assessee who carries on the business of plying,hiring or leasing goods carriages and who owns not more than 10 goods carriages at any time during the year, the income shall be deemed to be Rs.5000/- from a heavy goods vehicle and Rs.4500/- fromm other than a heavy goods vehicle for every month or part of the month during which such goods vehicle is owned by the assessee in the previous year or such higher sum as declared in the return of income by the assessee.
An assessee who is in possession of a goods carriage,whether taken on hire purchase or on installments and for which the whole or part of the amount payable is still due shall be deemed to be the owner of such goods carriage. So according to this para you will be consider as deemed owner for the 10 vehicles which are hired(leased) by you and already owned by you is 8 i.e you are the actual owner. So total no of vehicles owned by you is 18(8+10)

According to the first para you should be make tax audit under section 44AB and no chance to offer income under section 44AE.

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2012 thanks for your valuable suggestion but my query is still unsolved because
1.he takes 10 vehicle on rent basis from another vehicle owner not on lease or hire purchase basis so i think sec. 44 AE will not apply.
11.as per sec. 44 AD any business excepts contained in 44AE can opt PIS.
So that mean if its not covered by 44AE than can we opt44 AD
please Reply ASAp

SAB KA MALIK EK HAI. jAI SAI RAM

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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08 September 2012 First clarify me Hire basis means if he want to transport his personal goods then he uses such vehicles for his personal transport then such 10 vehicles not deemed owner. Otherwise i.e if he taking such vehicles on hire basis i.e paying monthly fixed rental charges and such 10 vehicles he is using for his transport business in this case deemed owner.

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2012 SEC. 44AE CONTAIN THE WORD HIRE PURCHASES NOT ONLY HIRE. SO HIRE PURCHASES IS TAKING GOODS BUT CONSIDERATION TO BE PAID AS MONTHLY RENT.
IN THIS CASE BOTH PARTIES HAVE INDENT TO TRANSFER THE PROPERTY BUT IN CASE OF HIRE PROPERTY ARE TRANSFER FOR USE FOR SOME TIME NOT FOR PERMANENTLY TRANSFER

ON THE BASIS PLEASE CLARIFY MY QUERY

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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08 September 2012 First confirm is the assessee uses the vehicles for his transport business or for his personal purpose i.e for transport of his personal goods such as bought materials to the factory, for sent goods to the market etc..
As per section 44AE an assessee who is in possession of goods means not required transfer or intention to transfer of owner ship. However hire and lease means same meaning.

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2012 jai sai ram

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2012 he dons not use the vehicle for personal use

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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08 September 2012 Then he would be consider as deemed owner for such hired 10 vehicles.

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2012 ok thanks. in which firm u are a article
jai sai RAM

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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08 September 2012 Why you are required. I am articleship in middle size firm with very good knowledge auditor.

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2012 because i am also a CA

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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08 September 2012 Where from you. I does my Articleship at my home town Gudivada, Near to Vijayawada A.P. If you are Vijayawada SIRC related Member i will tell my employer's name.

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2012 no i am from rajasthan. any way dont mind and thanks for discussion.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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08 September 2012 Okay thanks with regards.

OM SAI SRI SAI JAI JAI SAI

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