CPE-Nadiad Posers

Posers on Section 44AA/AB/AD/ADA – AS RECEIVED FROM MEMBERS
20/5/2021
Anand Branch of WIRC of ICAI jointly with TPA, Nadiad
1. Assessee has income not exceeding the maximum
amount which is not chargeable to tax for A.Y.
2018-19 and has income from eligible business
which is less than 8% of the turnover. Is he required
to maintain books of accounts and get them
audited?
Page | 1
20/5/2021
2. Mr. K, a resident individual, carries on an eligible
business having turnover of Rs. 80,00,000/- for A.Y.
2018-19. However he has earned profit of only
Rs.1,50,000/-.Since he does not have any other
income can he/ filed return of income without
maintaining any books of accounts. Can he do so?
Page | 2
20/5/2021
3. Mr. a is a tobacco trader. In addition to tobacco
Trading, he is also acting as commission agent for
tobacco. He has filed his return of income for A.Y.
2017-18 as per provisions of sec. 44AD. The A.O.
has issued notice proposing to treat the return as
invalid. How would you respond to the notice?
Page | 3
20/5/2021
4. Mr. Z, a resident individual, carries on the following
commercial activities:
1. Business of construction – Turnover -Rs. 55 Lacs
2. Architect - Rs. 20 Lacs
Can Mr. Z avail of presumptive taxation u/s 44AD
of the Act for his business of construction?
Can Mr. Z avail of presumptive taxation u/s 44ADA
of the Act for his Architect profession?
Page | 4
20/5/2021
5. Does doctor engaged in the medical profession as well as
running medical store can opt 44AD for Medical store?
Page | 5
20/5/2021
6. Does Engineer having consultancy income and income
from contract eligible for section 44AD ?
Page | 6
20/5/2021
7. Airline has discretion to its agents to sell air tickets at any
rate between the minimum commercial price and the
published price. Can the agent avail section 44AD
scheme?
Page | 7
20/5/2021
8. Can a licensed stamp vendor avail section 44AD scheme?
sell above the minimum commercial price. Can the agent
avail section 44AD scheme?
Page | 8
20/5/2021
9. Mr. X is resident in India. He is owning 10 JCBs and
running them on hire. Whether he can avail section 44AD
scheme or section AE scheme?
Page | 9
20/5/2021
10. Mr. LMN is resident in India. He runs coaching
classes. Can he avail section 44AD scheme if his annual
gross receipts are Rs. 70 lakhs?
Page | 10
20/5/2021
11. Ms. ABC is resident in India. She runs a beauty
parlour from which gross receipts per annum are around
Rs. 40 lakhs. Can she avail section 44AD scheme?
Page | 11
20/5/2021
12. Mr. A has income from business. His turnover is Rs.
1.90 lacks. Out of total turnover, Rs. 50.00 lacks is
received in cash. There are outstanding creditors of Rs.
60.00 lacks as on 31/03/2017. He has filed his return u/s
44AD on 30/09/2017. Amount realized through bank
collection from debtors till filing of return is Rs. 40.00
lacks. No amount was realised from debtors till July, 2017.
Mr. A has offered his income @ 6% on all credit sales on
the ground that subsequent collection in credit sales is by
a/c payee cheques only. A.O. has selected the case for
scrutiny and has issued show cause notice to tax credit
sales at 8%. Further he has also issued show cause notice
for levy of penalty u/s 271B. Is action of A.O justified.
Page | 12
20/5/2021
13. Total turnover 100 Lacs in FY 2017-18, out of
which 60 received during the year which includes
30 lacs through cheque and digital mode.
Calculate deemed business profit.
 If 40 lacs receivable received after due date
through cheque does it make difference.
 If out of 40 lacs receivable, Rs. 5 Lacs from
same customer received in cash before filling
of ITR of FY 2017-18, what happens?
Page | 13
20/5/2021
14. Persons offering income u/s 44AD are not
required to maintain books of accounts. What
documents should be maintained to establish
sales/turnover for filing return as per provisions
of Sec. 44AD.
Page | 14
20/5/2021
15. MR. A is a theatre artist. He is advised that his
income is income from profession and he can file
his return as per provisions of Sec. 44 ADA. Is this
advice legal and correct? If his gross receipt is in
excess of Rs. 50.00 lacks, can he file his return u/s
44AD?
Page | 15
20/5/2021
16. A photographer has filed his return of income
showing gross receipt from profession at Rs.
40.00 lacks. He has filed his return u/s 44ADA.
A.O. has treated the return as invalid. Is action of
A.O. justified?
Page | 16
20/5/2021
17. Mr. A has filed his return of income as per
provisions of Sec. 44AD. During year under
assessment, he has taken unsecured loan of Rs.
10.00 lacks. Can A.O. invoke provisions of Sec. 68
if return of income is filed u/s 44AD?
Page | 17
20/5/2021
18. Mr. A has turnover of Rs. 90.00 lacks and has
offered income @ 8% being Rs. 7.2 lacks. He has
further claimed deduction u/s 80C of Rs. 1.50
lacks and a deduction of Rs. 2.00 lacks u/s 24.
During the year he has repaid housing loan of Rs.
5.00 lacks. A.O. proposes to estimate income of
assessee higher than 8% on the ground that he
has investment of Rs. 6.5 lacks during the year
and there are HH Expenses of Rs. 3.00 lacks. Thus
A.O. is proposing to estimate income from
business at Rs. 9.50 lacks. Is action of A.O.
justified? How will you advise MR. A.
Page | 18
20/5/2021
19. ABC a firm has agency business. The total
sales as sole selling agent is Rs. 150.00 lacks. The
firm wish to declare income as per provisions of
Sec. 44AD and claim further deduction of interest
paid on capital account of partners. Will firm
succeed in its claim?
Page | 19
20/5/2021
20. Mr. A is in to trading of goods. His total sales
are Rs. 90.00 lacks. Out of total sales, cash sales is
Rs. 10.00 lacks. There is purchase of Rs. 40.00
lacks against which sales are made to the same
party and there are no receipts/payments.
Balance sales of Rs. 40.00 lacks is by a/c payee
cheques. Mr. A want to declare profit u/s 4AD and
claims profit @ 6% on sales of Rs. 80.00 lacks
being non cash sales and 8% on sales of Rs. 10.00
lacks. Is claim of Mr. A correct.
Page | 20
20/5/2021
21. Mr. A is a writer. His gross receipt is Rs. 20.00
lacks. His expense of profession are Rs. 17.00
lacks and has filed his return after maintaining
regular books with total income of Rs. 3.00 lacks.
A.O. is proposing to issue notice for penalty u/s
271B since Mr. A has not declared his income as
per provisions of Sec. 44ADA. Is Action of A.O.
justified?
Page | 21
20/5/2021
22. An eligible assessee carrying on eligible
business, be called up on to produce books of
accounts, maintained for some other purposes or
statutory requirements, by theAO?
Page | 22
20/5/2021
23. Mr.J, a resident individual, carries on an
eligible business having turnover of Rs.90,00,000/-
for A.Y. 2017-18. However he earned profit of only
Rs.3,10,000/-. Since he fell under sub-section (5) of
S.44AD of the Act, he maintained books of accounts
and got them audited too.
 Whether provisions of tax deducted at source
would be applicable to him for A.Y. 2017-18 or
AY 2018-19 for the payments made during FY
2017-18?
Page | 23
20/5/2021
24. Can an assessee show only 8% profit even
when he has earned 50% profit from itsturnover?
Page | 24
20/5/2021
25. Can return filed u/s 44AD of the Act be
selected forscrutiny?
Page | 25
20/5/2021
26. Can addition u/s 68 of the Act or S. 56(vii) of
the Act be made to returned income declared u/s
44AD of theAct?
Page | 26
20/5/2021
27. Assessee Mr. X is owning 11 trucks. He is
carrying on the business of running these trucks on
hire. Mr. X is resident. Can he avail the section
44AD scheme in respect of his business?
Page | 27
20/5/2021
28. Whether sales tax/excise duty/GST collated is
to be included in turnover?
Page | 28

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CPE-Nadiad Posers

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Posers on Section 44AA/AB/AD/ADA – AS RECEIVED FROM MEMBERS

1. Assessee has income not exceeding the maximum

amount which is not chargeable to tax for A.Y.

2018-19 and has income from eligible business

which is less than 8% of the turnover. Is he required

to maintain books of accounts and get them

2. Mr. K, a resident individual, carries on an eligible

business having turnover of Rs. 80,00,000/- for A.Y.

2018-19. However he has earned profit of only

Rs.1,50,000/-.Since he does not have any other

income can he/ filed return of income without

maintaining any books of accounts. Can he do so?

3. Mr. a is a tobacco trader. In addition to tobacco

Trading, he is also acting as commission agent for

tobacco. He has filed his return of income for A.Y.

2017-18 as per provisions of sec. 44AD. The A.O.

has issued notice proposing to treat the return as

invalid. How would you respond to the notice?

4. Mr. Z, a resident individual, carries on the following

1. Business of construction – Turnover -Rs. 55 Lacs

2. Architect - Rs. 20 Lacs

Can Mr. Z avail of presumptive taxation u/s 44AD

of the Act for his business of construction?

Can Mr. Z avail of presumptive taxation u/s 44ADA

of the Act for his Architect profession?

5. Does doctor engaged in the medical profession as well as

running medical store can opt 44AD for Medical store?

6. Does Engineer having consultancy income and income

from contract eligible for section 44AD ?

7. Airline has discretion to its agents to sell air tickets at any

rate between the minimum commercial price and the

published price. Can the agent avail section 44AD

8. Can a licensed stamp vendor avail section 44AD scheme?

sell above the minimum commercial price. Can the agent

avail section 44AD scheme?

9. Mr. X is resident in India. He is owning 10 JCBs and

running them on hire. Whether he can avail section 44AD

scheme or section AE scheme?

10. Mr. LMN is resident in India. He runs coaching

classes. Can he avail section 44AD scheme if his annual

gross receipts are Rs. 70 lakhs?

11. Ms. ABC is resident in India. She runs a beauty

parlour from which gross receipts per annum are around

Rs. 40 lakhs. Can she avail section 44AD scheme?

12. Mr. A has income from business. His turnover is Rs.

1.90 lacks. Out of total turnover, Rs. 50.00 lacks is

received in cash. There are outstanding creditors of Rs.

60.00 lacks as on 31/03/2017. He has filed his return u/s

44AD on 30/09/2017. Amount realized through bank

collection from debtors till filing of return is Rs. 40.00

lacks. No amount was realised from debtors till July, 2017.

Mr. A has offered his income @ 6% on all credit sales on

the ground that subsequent collection in credit sales is by

scrutiny and has issued show cause notice to tax credit

sales at 8%. Further he has also issued show cause notice

for levy of penalty u/s 271B. Is action of A.O justified.

13. Total turnover 100 Lacs in FY 2017-18, out of

which 60 received during the year which includes

30 lacs through cheque and digital mode.

Calculate deemed business profit.

 If 40 lacs receivable received after due date

through cheque does it make difference.

 If out of 40 lacs receivable, Rs. 5 Lacs from