Section 44ad

This query is : Resolved

Rajesh Goyal (Querist)
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18 March 2015 Dear Experts,

An assessee has made a turnover of Rs. 2000000/- during the year 2013-14. The actual profit made is @ 20%, i.e. Rs. 400000/-.

Now the assessee wants to avail section 44AD and declare profit @ 8% of Rs. 2000000/- i.e. Rs. 160000/- whereas the actual profit is Rs. 400000/-

Can he claim benefit of section 44AD.
Further is he claims 44AD, what will be the profit that he will show in his individual P & L and Capital A/c, Rs. 160000/- or Rs. 400000/-

Regards,

Soumitra Basu

Soumitra Basu (Expert)
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19 March 2015 In this case he can take the benefit of section 44AD provided he credited his capital account by Rs. 1,60 Lacs. The balance amount, if detected, shall be treated as concealed income.