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44ad

24 March 2012

I have a proprietorship firm for AY 2011-12 i showed a profit of 150,000 i am maintaing all books of accounts. but my turnover was 28 lakhs so no audit was done. hence i have to assume income as 8% of my turnover ie 232000 (approx). MY tax consultant say to increase the clsoing stock so that in my books that profit is reflected which is coming U/s 44AD. but my point is that we dont need to alter the p/l or B/s.
any suggestion or point?

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CA.Ganesh (Practicing Chartered Accountant) (308 Points)
Replied 24 March 2012

section 44AD (5) , an eligible assessee who claims that his profits and gains from the eligible business as lower than the profits and gains at the rate of 8 percentage and whose total income exceeds the maximum amount which is not chargeable to income- tax, shall be required to keep and maintain such books of account and other documents as required under sub- section (2) of section 44AA and get them audited and furnish a report of such audit as required under section. In your case total income is less than basic exemtion limit, no adjustment is required and no audit is required