27 August 2013
A senior citizen who is a pensioner runs a proprietary business of travel agency. in Jan 2013 , the house of person including office got destroyed in a fire mishap. All relevant documents relating to business got burnt in it. No other record except bank statement relating to business tractions. Due to above stated at the time of making accounts for fy 12-13 it was observed that there is more expenditure than receipts resulting the firm to go in to loss. Chartered accountant of the person has asked the person to show minimum profit of 15% as the travel agencies cant show loss in the business .As per the person he is running his business on the profit margin of 2—3% per assignment. My query is it must to show for the travel agency to show profit? If, Yes , how much profit is reqd to be shown. Can we show profit less than 15%. ? Moreso, when you are working on the margin of 2-3%
28 August 2013
If Books are properly maintained will related documents, profit or loss will be taken as per books, subject to sect. 44AD. Profit may be less than 15% or even loss.
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