Comment on Notice under Section 139(9)? - Possible reason

trueblue commented on 23 Aug 2015, 03:59 PM


I have a small query on my previous year return (AY 2014-15), for which I have today received a notice u/s 139(9). The notice says that since my net profit was below 8% of turnover, auditing of book is compulsory.

Below are the relevant particulars of my business section (omitting my salary section). The turnover is only from part-time Futures and Options trading.

Sale of goods: 4,47,071
Purchase of goods: 2,96,134

Turnover = 7,43,205
Gross Profit = 1,50,937

Further I have claimed following expenses:
Staff Welfare: 72,000
Telephone: 19,488
Brokerage: 3,774
Depreciation: 66,117
Total expenses: 1,61,379

Net Profit: (-)10,442

I was not aware of the 8% rule. Now, since I am a small time trader and don’t have detailed book keeping especially of staff welfare part, my query is whether I can change the expenses part so that the profit comes to be more than 8 % of turnover (i.e. Rs. 59,457). Will the taxman agree to me changing the claimed expense? I still won’t have to pay additional tax as it will be set of by carried-forward losses.

Thank you,

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