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Business Loss & 44AD(5)

27 September 2018

as per 44 AD(4) & (5), in which scenerio i m not required to get my books of account audited if my business income is in loss and resulting total income in -ve. please clarify it as my case is selected for scrutiny. Thanking you in anticipation.

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (166300 Points)
Replied 27 September 2018

After adjust ment of loss, what is your net taxable income?.....

What is your turnover of the business?

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PRABHAT KUMAR (142 Points)
Replied 27 September 2018

sir it is -12 lakhs. Actually i had incurred f & o loss of 13 lakhs and i shown it as business loss in return for a.y. 2016-17. Now, my case is selected for scrutiny and reason for selection is "claiming high business loss without maintaing any books of account". what should i do? As everyone having distinct view on this subject, i'm totally confused. please show me right way out.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (166300 Points)
Replied 28 September 2018

1. First of all, loss cannot be declared without books of accounts, unless net total income is below exempted limit.

2. Secondly, criteria of computer assessed selection for scrutiny is defined by department and no such rules are defined in act, so no one will be able to clarify on that question, that why such cases are selected for particular year and not earlier........

3. Being F&O loss of 13 lakhs, no need to worry...... even books can be prepared/produced based on the transaction statements and as such you can file return u/s. 142(1) at this juncture, with books of accounts.

4. Advised to hire services of CA/tax consultant for its proper reply and follow up.

Good Luck.

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PRABHAT KUMAR (142 Points)
Replied 28 September 2018

thnankyou so much sir !
but which type of books of account i'm supposed to maintain for f&o business. sir one more thing, in 1st point u hv mentioned that if your net total inc. is below exempted limit then without maintaining books of account you can declare your loss incurred. sir, in my case net total income is in negative and so is below exempted limit. then i should i maintain any books of account. please clarify it. It will be great help for me.