No it's not an ILLEGAL practice, the requirement of sec 44 AD is to show MINIMUM 8 % profit on turn over, you can show 80000/- profit , even if u made 4 lac profit , similarly in case of 4 lac loss ,u have to show 80000/- profit if u want to submit return u/sec 44AD ( to avoid audit / books of accounts etc).
Now,what 8% rule says?Do I even need to file a return?
But on 3rd year,I'm back to the business so 44AD will remain intact?
Are you CA? CA word is there in your Login name : mmca2006