Case Law Details
Case Name : Anandkumar Vs ACIT (Madras High Court)
Appeal Number : Tax Case Appeal No. 388 of 2019
Date of Judgement/Order : 23/12/2020
Related Assessment Year : 2012-13
Courts :
All High Courts Madras High Court
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Anandkumar Vs ACIT (Madras High Court)
Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that interest and salary received by the assessee from firms in which he was a partner cannot be construed as business income u/s. 28 Please become a Premium member. If you are already a Premium member, login here to access the full content.
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There is lot of confusion regarding 44AD and 44ADA. First of all there is no need to take Salary or Interest from the firm, while they file returns under 44AD. Once the return is filed under 44AD, the whatever money is available in the firm is profit and partners can draw money from the firm, tax free. There is difference between deemed profit and actual profit. Law itself clerkly states that, 8% is considered after consider all requirements between section 30 and 38. That means, more money is available with the firm, than the profit declared. So, partners can withdraw, whatever money (if available), tax free. And if any outstanding is there from the firm, all partners are liable to pay the same from their personal money, if firm cannot meet such obligations.