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2023 (10) TMI 130 - AT - Income TaxTDS u/s 194J - Tax on fees for professional and technical services - Assessee by filing its of income u/s 44AD of the Act shown its income @8% on receipts from the business of consultancy qua stamp duty and registration - AO/CPC added the income @50% u/s 44 ADA of the Act, which resulted into making the addition - HELD THAT - As both the authorities below applied the provisions of section 44ADA of the Act, which in fact deals with persons carrying on legal, medical, engineering or architectural profession or profession of accountancy, technical consultancy or interior decoration or any other profession as is notified by the Board in the official gazette. Admittedly the Assessee is just a 10th/matriculation passed and do not have any qualification to act as a legal, medical, engineering or architectural professional or professional accountancy or technical consultancy of interior decoration or any other profession as is notified by the Board in the official gazette, as prescribed under section 44AA of the Act. As the Assessee s case does not fall under the provisions of section 44ADA of the Act and therefore the addition sustained by the learned Commissioner to the extent is liable to be deleted. Appeal filed by the Assessee stands allowed.
Issues involved:
The appeal against the order passed by the Commissioner of Income Tax/National Faceless Appeal Centre under section 250 of the Income Tax Act, 1961 for AY 2017-18. Details of the Judgment: Issue 1: Addition of income under section 44ADA of the Act The Assessee declared income @8% on receipts of Rs. 8,30,800/- from consultancy business, including Rs. 4,81,280/- on which TDS was deducted under section 194J for professional and technical services. The AO/CPC added income @50% under section 44 ADA, resulting in an addition of Rs. 2,40,640/-. The Commissioner upheld the addition, considering the deductors as big corporates and the nature of services as covered under section 44ADA. However, the Assessee, not qualified for professions specified under section 44ADA, challenged the addition. Decision: The Tribunal observed that the Assessee's case did not fall under the provisions of section 44ADA as the Assessee lacked the qualifications for professions specified. Therefore, the addition of Rs. 2,40,640/- was deemed liable to be deleted. Result: The appeal filed by the Assessee was allowed. The judgment was pronounced in the open Court on 29th August, 2023.
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