Case Law Details
Vishnu Dattatraya Ponkshe Vs Central Processing Centre (ITAT Mumbai)
Introduction: In a recent decision, the Income Tax Appellate Tribunal (ITAT) Mumbai provided a crucial ruling in the case of Vishnu Dattatraya Ponkshe vs. Central Processing Centre (CPC). The case pertains to the assessment year 2017-18 and revolves around the taxation of income earned from a consultancy business. The ITAT’s decision clarifies the applicability of Section 44ADA of the Income Tax Act in such scenarios.
1. Background of the Appeal: The appellant, Vishnu Dattatraya Ponkshe, challenged an order passed by the Commissioner of Income Tax/National Faceless Appeal Centre (CPC) under Section 250 of the Income Tax Act for the assessment year 2017-18.
2. Income Under Section 44AD: The appellant had declared income under Section 44AD of the Income Tax Act, which prescribes a presumptive income scheme. The income was calculated at 8% of receipts from the consultancy business related to stamp duty and registration.
3. Addition Under Section 44ADA: The Assessing Officer (AO)/Central Processing Centre (CPC) added a portion of the income, specifically the amount on which Tax Deducted at Source (TDS) was deducted under Section 194J (fees for professional and technical services). This resulted in an addition of Rs. 2,40,640 under Section 44ADA of the Act.
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