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AuthorQuestion Title
Neha Agarwal
Totally Confused (Is maintenance of books of Accounts u/s 44AA is compulsory)???

In case of Non-specified employees. 3 Points are categorized for maintenance of books of Accounts
u/s 44AA 1) Gross profit if exceeds Rs: 120000/- in any of last 3 previous years. 2) Turnover if
exceeds Rs: 10 Lac in any of last 3 previous years. 3) If profit exceeds more than 8% on turnover
u/s 44AD. Above condition are satisfied for maintenance of books of Accounts u/s 44AA. I have to
file a return of a new assesse 1st time, whose returns of last previous years were filled by a
Lawyer. who filled ITR-4 of previous years of return of the same assesse where he showed amount in
(Gross receipts) in last three financial years (fy12-13 790500) (fy13-14 850500) (fy14-15 960000)
& showed (Net profit) after deducting expenses incurred by assessee in last returns such as
(fy12-13 650000) (fy13-14 740000) (fy14-15 802500). Expenses deducted by Lawyer is assumed by him
not actually provided by Assessee. Assessee is running school from 1st to 5th class except school's
income Assessee doesn't have any other income. He never maintains books of Accounts as he already
told me. Here I am confused at previous laywer mistake. 1) why he filled ITR-4 & shown gross
receipt & net profit upto the extent of that amount which make assessee in compulsion to
maintain books of Accounts however as per previous years return of asseessee it is compulsory for
him to maintain books of accounts. 2) Why isn't notice from department received till date to
assessee as amount feeded by lawyer as net profit in previous returns enable assessee to maintain
books of accounts. 3) Now I have to file assesse's return of FY 15-16 & have to show Gross
receipt more than 10 lac & net receipt should be around 8.10 lac after adjusting expenses. If I
file his return in ITR-4S in stead of ITR-4 in that case If I increase his turnover around 15 lac
& calculate 60% profit as Rs 9 lac on which tax would be calculated. i want to know would there
be any problem & notice from Dept may be receipt, If I do so and Dept may ask why I change the
ITR to file return from ITR-4 to ITR4S. Please answer as early as possible as I am very confusion in
case of assessee.
whether reporting of Stock debtors and cash is compulsory in Schedule BP of ITR4S in case of
income u/s 44AD

You can file ITR4S only for income computed computed U/S 44AD income tax act or where income is
computed on presumptive basis. If you think running of school is business you can file return u/s
44AD -ITR 4S .In that case if profit offered for tax is 8% OR more of gross receipt there is no need
to maintain books of accounts.

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