Case Law Details
Case Name : I.T.O. Vs Mark Construction (ITAT Kolkata)
Related Assessment Year : 2007-08
Courts :
All ITAT ITAT Kolkata
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In the case of CIT vs Surendra Paul reported in 242 CTR 61 (P&H) the Hon’ble Punjab and Haryana High Court has held that once under the special provision of section 44AD of the IT Act exemption from maintenance of books of accounts have been provided and the presumptive tax at 8% of the gross receipts itself is the basis for determining the taxable income, the assessee was not under obligation to explain individual entry of cash deposits in the bank unless such entries had no nexus with the gross receipts. In the present case though from the details filed by assessee the ld. AO observed ...
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Yes Interest and Remuneration can be paid to partners even if return is filed u/s 44AD
Can we provide interest & remuneration to the partners, if we 8% profit bas 44AD?
S. 40 starts with words “notwithstanding anything to the contrary in section 30 to 38, the following amounts shall not be deducted…..
S. 44AD starts with wordings Notwithstanding anything to the contrary contained in section 28- 43C, in the case of an eligible assessee…..
We find that both provisions are having overriding effect. One provision that is section 44AD provides for a special case, whereas S.40 is a general provision applicable in all cases.
There seems no exemption from compliance from provisions of TDS and TCS merely because assessee has opted application of S.44AD. We find that exemption from payment of advance tax in relation to eligible business is conferred vide S. 44AD (4) but there seems no exemption from TDS and TCS. Therefore In such circumstances, disallowance under section 40 a(ia) is justified. However, in view of provisions, the disallowance cannot be made while computing income u/s 44AD, a sheld by Tribunal in the case under consideration above.
To avoid controversy and also to avoid revenue leakage, it is desirable that assessee should be required to file a declaration to adopt special provisions before filing of return and if assessee has not so adopted special provisions then general provisions should be applied..
S. 40, 40A and 43B may be made applicable in case of S.44AD also so that special socio-economic purposes of these provisions are not defeated.
A timely amendment will avoid retrospective amendment later on.