Issue of 44-ad & heavy nett profit

This query is : Resolved

TARIQUE RIZVI (Querist)
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23 July 2019 We have given the whole plant and machinery on Rent/Lease. There are Rental Income from the tenant/lesee as against which we are claiming depreciation, employee salary, telephone and fax charges. Mobile charges, Municipal Taxes, and GST in our books of account. In such situation we have treated rental income as business income. Net Profit arrives as at Rs 63,63,445 out of Gross Rental Income of Rs 64,80,000 @ 98.20%. Instead of showing Nett Profit @ 98.20% in ITR-5 whether we can file the said return right in ITR-5 but under section 44-AD while declaring therein 6% Nett Profit because al the transactions are through cheque only. This way we will save tax liability on 96.20% Nett Profit. Whether in such case can we take the benefit of 44-AD ?

CMA ALKESH PATEL

CMA ALKESH PATEL (Expert)
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24 July 2019 Rent on plant and machinery is not a INCOME FROM BUSINESS
As per Income Tax it is a Income From OTHER SOURCE
so , You can not take benefit of sec 44AD,