Addressing notice under sec 139(9) on ITR-4
Dear Sir/Madam,
I e-filed my return for FY 2015-16 on 31st May 2016 in form ITR-4. The sources of income included salary, capital gains, business & profession, house property and income from other sources. The income from business was derived by trading in futures and options (FNO). The turnover of trading was about Rs 70 lacs and the profit from business declared was Rs 775000. As the turnover was below the limit of Rs 1 cr and profit was > 8% of turnover, I understand that I was eligible to report my business income u/s 44AD (presumption basis) and the maintenance of books of accounts (44AA) and audit of accounts (44AB) was not required. I provided the relevant profit information in P&L schedule under ‘NO ACCOUNT CASE’. I have been following the same approach for the last 3 years; however the income from business was below Rs 3 lacs.
CPC has raised a defect issuing notice under sec 139(9) saying that “income has been derived under the head ‘business and profession’ but complete information has not been provided under balance sheet and profit & loss”. I have been asked to either accept the defect and re-file u/s 139(9) with the details asked for or to provide my response for not accepting the defect.
Please answer my following queries considering the above information.
1. Am I correct in reporting my business incomes under ‘No Account Case’ and hence may maintain a stand that notice u/s 139(9) is invalid?
2. If a balance sheet needs to be prepared for income from proprietary business, is it okay to consider assets/liabilities only from business point of view or the individual’s total assets / liabilities over and above business also need to be considered?
Many thanks in advance!
Sincerely,
Anil Kumar more
I e-filed my return for FY 2015-16 on 31st May 2016 in form ITR-4. The sources of income included salary, capital gains, business & profession, house property and income from other sources. The income from business was derived by trading in futures and options (FNO). The turnover of trading was about Rs 70 lacs and the profit from business declared was Rs 775000. As the turnover was below the limit of Rs 1 cr and profit was > 8% of turnover, I understand that I was eligible to report my business income u/s 44AD (presumption basis) and the maintenance of books of accounts (44AA) and audit of accounts (44AB) was not required. I provided the relevant profit information in P&L schedule under ‘NO ACCOUNT CASE’. I have been following the same approach for the last 3 years; however the income from business was below Rs 3 lacs.
CPC has raised a defect issuing notice under sec 139(9) saying that “income has been derived under the head ‘business and profession’ but complete information has not been provided under balance sheet and profit & loss”. I have been asked to either accept the defect and re-file u/s 139(9) with the details asked for or to provide my response for not accepting the defect.
Please answer my following queries considering the above information.
1. Am I correct in reporting my business incomes under ‘No Account Case’ and hence may maintain a stand that notice u/s 139(9) is invalid?
2. If a balance sheet needs to be prepared for income from proprietary business, is it okay to consider assets/liabilities only from business point of view or the individual’s total assets / liabilities over and above business also need to be considered?
Many thanks in advance!
Sincerely,
Anil Kumar more
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Vikas Goel Sir, Vishnu Promod Srivastava Sir was kind enough to go through the details of my case and point out that I had missed to report the Gross Receipt / Turnover while providing details under 'NO ACCOUNT CASE'. As per my limited knowledge, Requirement to maintain books of accounts and have them audited depends more upon the turnover and the profit margin declared than the nature of business the income is earned from. Please correct me if I am wrong. Since you are CA and trading in FnO, I am taking the liberty to ask one more question. For FY 2016-17 can I use ITR-4 to report business income from FnO on presumption basis? I mean if turnover is upto 2 cr, can I declare a net profit 8% of turnover under 'NO ACCOUNT CASE'? I am insisting on ITR-4 as I also have income from sources that ITR-4S does not allow. For FY 2015-16, I anyway reported the actual profit which was greater than 8% of turnover. Thanks, Anil Kumar more
Jul 13
I also got notice on the same issue however, it was in eform to which i responded that since it was FnO income I have not don't the audit. There was no response after that more
Jul 12
ANY HOW since IT dept. has called u to visit on particular day pl visit other wise problem may increase. if possible pl consult a good CA or IT advisor to sort out problem. more
Jul 11
In balance sheet, you need to show assets and liabilities forming part of your business, and not personal assets more
Jul 08
