9911796707
TMI Blog2019 (10) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... not found income appearing in Form 26AS not having been included in computing the total income declared in the return of income field by the Assessee. The adjustment under section 143(1)(a)(vi) of the Act can be resorted to only when the sum of ₹ 15,00,000/- is not included in computing the total income declared in the return of income. The CBDT s instruction No.10/2017 dated 15.11.2017 has clearly laid down that only when receipts are completely omitted to be declared in the return of income can there be an addition for invoking 143(1)(a)(vi) of the Act. The submissions made by the Assessee in this regard have not been considered by the CIT(A) in the impugned order. The addition that the income appearing in Form 26AS not having been included in the return of income filed is sine qua non for invoking the provisions of section 143(1)(a)(vi) since the same is absent in the present case. We are of the view that the CPC ought not to have made the impugned adjustment. The addition made is liable to be deleted on this basis alone. The issue whether income earned by the Assessee has to be taxed u/s.44AD or Sec.44ADA of the Act cannot be subject matter of decision in processing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and (ii) who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading C. - Deductions in respect of certain incomes in the relevant assessment year; (b) eligible business means,- (i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and (ii) whose total turnover or gross receipts in the previous year does not exceed an amount of 87[two crore rupees]. 3. The return of income of the Assessee was processed by Centralized Processing Centre(CPC) electronically u/s.143(1)(a) of the Act. U/s.143(1)(a) of the Act, return of income shall be processed in the following manner:- (a) the total income or loss shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the return; 13[***] (ii) an incorrect claim, if such incorrect claim is apparent from any information in the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of such profession or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the Assessee, shall be deemed to be the profits and gains of such profession chargeable to tax under the head Profits and gains of business or profession . 6. Sec.44AA(1) of the Act applies to the following professionals: Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act. 6. The CPC proposed to make the addition in the show cause notice by relying on the provisions of Sec.143(1)(a) (vi) of the Act which provides for addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return . In response to the above proposal, the Assessee submitted he was not covered by Sec.44AA(1) of the Act and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plain reading of the act that Section 44ADA is applicable if an Assessee carries on the profession specified in Section 44AA(1). Thus, if an Assessee does not carry on the specified profession he can offer his income/receipts on presumptive basis u/s 44AD. Moreover subsection 6 to Section 44AD also emphasis this fact by clearly excluding assesses carrying on the specified profession as per section 44AA(1) from the gambit of section 44AD. The Assessee is in the business of providing management consultancy services. During the previous year relevant to assessment year 2017-18, the Assessee received a gross amount of ₹ 15,00,000/- as fees for providing such services. The Assessee enclosed Invoices and computation of income and 26AS of the Assessee. The customer of the Assessee deducted tax u/s 194J. The Central processing Centre made addition of 50% on total fees of ₹ 15,00,000/- stating that there is inconsistency in the amount offered u/s 44ADA on presumptive basis of schedule BP and receipts available in form 26AS. TDS is deductible u/s 194J on payment towards professional services or technical services. Professional services has been defined in 194J to have the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of section 44ADA. Hence there is no infirmity in the action of the AO as far as invoking the provisions of section 44ADA is concerned. Further, the appellant's claim of being denied an opportunity of being heard is without basis as the AO had issued a intimation proposing the adjustment as mandated by Instruction no.10 of 2017. However, the appellant had already offered income u/s 44AD at the rate of 8% of gross receipts, hence the total addition exceeds the presumptive scheme of taxation u/s 44ADA. The AO is directed to take necessary rectificatory action to tax the gross receipts u/s 44ADA alone. 12. Aggrieved by the order CIT(A), the Assessee is in appeal before Tribunal. The learned counsel for the Assessee reiterated submissions as were made before CIT(A). The learned DR submitted that the income of the Assessee is assessable u/s.44ADA of the Act. 13. I have given a careful consideration to the rival submissions. The disputed adjustment to the total income declared by the Assessee has been done by the CPC in exercise of powers under section 143(1)(a)(vi) of the Act. It is not in dispute before us that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
