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TMI Blog2022 (3) TMI 1470X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is working as Managing Director and in-charge of day to day affairs of the company. But, what is required to be seen is whether a consultant can work as managing director or only a regular employee is entitled to work as managing director. In our considered view, there is no restriction under law for appointing consultant / professional as managing director of the company and to entrust day to day affairs of the company. In our considered view, by profession, if he is competent enough to discharge his function, then the company may appoint any person to suitable post. Merely for the reason that the assessee had been designated as managing director, it cannot be said that professional fee received by the assessee for rendering pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of the assessee. If at all, the assessee has availed loan and made investments in fixed deposits, then interest paid on loan should be deducted against interest earned from fixed deposits, because there is direct nexus between income and expenses. If at all, the assessee availed loan from HUF for the purpose of business, then also it needs to be allowed as deduction, because the assessee has treated professional fees as income and thus, whatever expenditure including interest paid, if any, needs to be allowed as deduction. Therefore, the Assessing Officer is directed to verify claim of the assessee and allow the deduction accordingly. - I.T.A. No. 1770/Chny/2019 - - - Dated:- 16-3-2022 - SHRI G. MANJUNATHA, ACCOUNTANT MEMBER AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On these grounds and on such other grounds as may be put forth at the time of hearing, the appellant prays that the: i) Rs.1,54,34,001 be assessed under Income from Profession , instead of salary income; ii) Expenditure and depreciation totaling to Rs.2,l0,917, be allowed as deduction against professional income: iii) Deduction of interest paid, Rs.1,10,000 be allowed from the income of Rs.9,17,985 assessed under other sources ; and justice rendered. 3. Brief facts of the case are that the assessee is an individual, filed his return of income for the assessment year 2013-14 by disclosing income from house property, income from profession and income from other sources. During the course of assessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns made by the Assessing Officer. Aggrieved by the learned CIT(A) order, the assessee is in appeal before us. 4. The learned A.R for the assessee referring to professional service agreement submitted that the assessee has received consultancy fees from the company on monthly basis for which he had charged service tax. He further submitted that the company has deducted TDS u/s.194J of the Act, as applicable to professional charges. The assessee has maintained regular books of account and his books of account are audited u/s.44AB of the Income Tax Act, 1961. Therefore, merely for the reason that the assessee works as a Managing Director, it cannot be said that professional fees received from the company is salary assessable under the head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961. It is also an undisputed fact that the assessee maintained regular books of account and his books of accounts are audited u/s.44AB of the Income Tax Act, 1961. All these evidences clearly prove that amount received by the assessee from the company is for rendering professional services. But, only objection of the Assessing Officer to treat professional income received from the company under the head income from salary is nature of services rendered by the assessee to the company. As per agreement between the parties, the assessee shall be designated as Managing Director, and he has been entrusted with work of day to day overall operations of the company. No doubt, the assessee is working as Managing Director and in-charge of da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came up for consideration from ground no.3 of assessee appeal is disallowance of interest paid at Rs.1,10,000/- against interest income. The assessee has reported interest income under the head income from other sources at Rs.9,17,985/-. The assessee claimed that it has availed loan from HUF and paid interest of Rs.1,10,000/- and further, same has been deducted against interest received from deposits. 8. Having heard both parties, we find that the fact of set off of interest paid on loans borrowed from HUF against interest received is not forthcoming from the orders of the lower authorities. Further, on perusal of profit loss account, the assessee has debited interest paid on loan from HUF to the profit loss account. Therefore, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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