TaxTMI 
TaxTMI 
2025 (7) TMI 1365
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....during the course of hearing that both the learned lower authorities have refused to accept the assessee's claim to be assessed u/s 44ADA of the Act, in the course of assessment framed on 29.04.2021 and upheld in the lower appellate discussion as under: 5. AO's Findings: In this case, the assessee received remuneration of Rs. 27,00,000/- as a partner of M/s SARC and Associates Chartered Accountants. 50% of the same was offered to taxation under provisions of section 44ADA of the Income Tax Act. It was claimed before the AO that he fulfills all conditions prescribed under provisions of section 44ADA. The remuneration is received by him since he is a Chartered Accountant and a member of Institute of Chartered Accountants, and....
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....s of a profession carried out by him for the purpose of section 44ADA. 5.2 The AO also noted that the appellant has declared entire remuneration as business income during AY 2016-2017 and 2017-18. 5.3 The AO also distinguished the decisions of the Hon'ble Kolkata ITAT in the case of Sagar Dutta and the decision of the Hon'ble Supreme Court in case of Ramnik Lal Kothari. The AO further placed reliance on decision of the Hon'ble Chennai ITAT Shri A. Anand Kumar (ITA no. 573/CHNY/2018) which was confirmed by the Hon'ble Madras High Court in its decision dated 21.12.2023 (case appeal no. 388 of 2019) of Madras High Court. In the case of Shri A. Anand Kumar, the case was whether an assessee who received remunera....
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....from profession. Therefore, I agree with the AO that provisions of section 44ADA are as such not applicable to remuneration received from a firm. 6.3 The AO has distinguished the case laws relied upon by the appellant. In the case of Ramnik Lal Kothari (supra), the Hon'ble Apex Court held that appropriate allowances u/s 10(2) of the Income Tax Act of 1922 were deductible in determining taxable income of partner out of the share of the profits received from the firm. This position is accepted by the AO. However, he has not allowed any expenditure as no details are furnished by the assessee inspite of the specific show cause. The AO has also noted that the appellant offered entire remuneration for taxation as profit and gains fro....
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....e is an eligible assessee engaged in an eligible business and such business should have a total turnover or a gross receipt. Admittedly, the assessee who is an individual in the instant case is not carrying on any business. Therefore, the remuneration and interest received by the assessee from the partnership firm cannot be termed to be a turnover of the assessee [individual]. Similarly, it will also not qualify for gross receipts." The conclusion of the Hon'ble Court that remuneration and interest received from firm cannot be termed as turnover/gross receipts of the assessee, is very much relevant in the present case, even though it involves applicability of different section i.e. section 44ADA. 6.5 A few contentions ....