Astha (CA Practice ) (72 Points)
16 February 2009Hello everyone
I want to know whether a assesee who shows his income u/s 44AD as 8% of his gross receipts and his return is choosen under CASS and he is issued notice u/s 143(2), in this case whether A.O. can demand information and explanation like details of assets held by assessee and its expenses. Please reply soon its really urgent.
Regards
Astha
CA. Ashok shah
(CHARTERED ACCOUNTANT)
(333 Points)
Replied 16 February 2009
The assessee who has opted for Sec.44AD is not required to maintain books of accounts. Hence, assessee can not be asked to explain the entries of expenditure to the extent of 92% of contract receipt minus statutory allowances as held in Balaji Construction Vs. ACIT 72 ITD 559 (Pune). However, ITO may ask for the details of assets owned by the assessee.
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