Character of receipts under section 194J required independent verification; matter restored for fresh assessment after non-cooperation by assessee.

Tax deduction under section 194J was not conclusive of the character of receipts; the assessing authority had to independently determine whether the sums were business income under the presumptive scheme or professional income on the available material. Because the assessee did not cooperate or furnish supporting explanations despite opportunities, the controversy could not be resolved on the existing record. The matter was restored for fresh adjudication through a de novo assessment after granting reasonable opportunity of hearing.

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Issues: Whether the assessee's receipts were to be assessed under the presumptive scheme for business income or as professional income on the basis of tax deduction under section 194J, and whether the matter required fresh consideration.

Analysis: The addition was made by treating the receipts as professional fees only because tax had been deducted at source under section 194J. Such deduction by the payer was not binding on the assessing authority, and the nature of the receipts had to be independently examined on the material available on record. At the same time, the assessee had not cooperated in the assessment proceedings and had not furnished supporting explanation despite opportunities, so the controversy could not be finally resolved on the existing record.

Conclusion: The issue was restored to the Assessing Officer for fresh adjudication by passing a de novo assessment after giving reasonable opportunity of hearing to the assessee.

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