TaxTMI 
TaxTMI 
2019 (2) TMI 165
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.... apropos are that assessee had received remuneration and interest from partnership firms namely M/s. Kumbakonam Jewellers, M/s. ANS Gupta & Sons and M/s.ANS Gupta Jewellers during the previous impugned assessment year aggregating to Rs.58,53,000/-. While filing return for the impugned assessment year, assessee had applied presumptive rate at 8% under section 44AD of the Act and returned Rs.4,68,240/- as income from the above mentioned remuneration and interest. Assessing Officer was of the opinion that section 44AD could be availed only by eligible assessee engaged in eligible business. According to him, assessee was not doing any business independently but was only a partner in the firms. Further, as per Ld. Assessing Officer, assessee had....
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.... receipts for estimating the income. Reliance was placed on the judgement of Hon'ble Apex Court in the case of Munjal Sales Corporation Vs.CIT (289 ITR 298) (SC) and an order of Kolkata Bench of the Tribunal in the case of Sagar Dutta Vs.DCIT in ITA No.692/Kol/2012 dated 03.05.2013. 4. Per contra, Learned DR strongly supported orders of lower authorities. 5. We have heard rival contentions and perused material on record. Claim of the assessee is that interest and salary received by him from firms in which, he was a partner had to be construed as business income by virtue of section 28(v) of the Act and hence assessee is eligible for applying presumptive interest rate under section 44AD of the Act. Section 28(v) of the Act is reproduced h....
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.... firm assessable as such,- (i) any payment of salary, bonus, commission or remuneration, by whatever name called (hereinafter referred to as "remuneration") to any partner who is not a working partner; or (ii) any payment of remuneration to any partner who is a working partner, or of interest to any partner, which, in either case, is not authorised by, or is not in accordance with, the terms of the partnership deed; or (iii) any payment of remuneration to any partner who is a working partner, or of interest to any partner, which, in either case, is authorised by, and is in accordance with, the terms of the partnership deed, but which relates to any period (falling prior to the date of such partnership deed) for which such payment w....
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....omputing income under the head "profits & gains of business or profession. However, it exempts from the rigors of such prohibition, payment of salary, bonus, commission and interest to the extent specified in sub-clause (iv) and (v) of sub-section (b) thereof. Intention of the above Section, in our opinion, is that partner should not be disentitled from claiming reasonable remuneration where he is a working partner and also should not be denied reasonable interest on the capital invested by him in a firm. If these charges are not made in the accounts of the firm, then pro-rata profits of the firm would be higher, resulting in higher taxes to the firm. The payments therefore have to be construed indirectly as a type of distribution of profit....
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....ptive taxation for assessee engaged in the business of civil construction or supply of labour for civil construction in which a sum equal to eight percent of the gross receipts is deemed to be the profits and gains from business. Section 44AE provides presumptive provisions for the assessee engaged in the business of plying, hiring or leasing up to ten goods carriages in which a prescribed sum per vehicle is deemed to be the presumptive income of the assessee. Section 44AF prescribes a method of presumptive taxation for retail trade, under which the presumptive income is computed at the rate of a sum equal to five per cent of the total turnover. There has been a substantial increase in small businesses with the growth of transport and commu....
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....such business under the current provisions of the Income-tax Act. (e) An assessee opting for the above scheme is exempted from maintenance of books of accounts related to such business as required under section 44AA of the Income-tax Act. (f) An assessee with turnover below Rs. 40 lakhs, who shows an income below the presumptive rate prescribed under these provisions, in case his total income exceeds the taxable limit, required to maintain books of accounts and also get them audited. (g) The existing section 44AF is to be made inoperative for the assessment year beginning on or after 1st April, 2011. 21.3 Applicability - These amendments have been made applicable with effect from 1st April, 2011 and will accordingly apply in rel....