2026 (6) TMI 609

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....confirming the addition of 29,14,716 by holding that the provisions of section 44ADA are applicable to the appellant. 2. That the learned CIT(A) failed to appreciate that the appellant is engaged in referral and facilitation services for financial products and not in any profession specified under section 44AA(1) of the Income-tax Act. 3. That the learned CIT(A) erred in holding that the services rendered by the appellant require specialized professional expertise so as to fall within the ambit of section 44ADA. 4. That the learned CIT(A) failed to appreciate that the appellant's activities constitute business activity and therefore income declared under section 44AD at 8% of gross receipts is in accordance wi....

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.... and following additions may not be made to your return of income: 3.6.1 On examination of the return of income and financial statements furnished by the assessee, it is observed that the receipts in question are from professional and technical services for which tax has been deducted at source under section 194J of the Income Tax Act, 1961, the assessee's income must be computed as per section 44ADA of the Income Tax Act, 1961or the regular provisions of the Income Tax Act. The presumptive scheme under section 44AD is specifically not permitted for professional fees, and therefore, the claim of lower presumptive income under 44AD of the Income Tax Act, 1961 is not applicable in the case of the asssessee. Professional income, i....

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.... of receipts of the assessee, u/s 194J of the Act. The implicit view taken by the tax deductor, by deduction of tax at source u/s 194J of the Act, that the payments made to the assessee were in the nature of professional fees, cannot be regarded as binding upon the statutory authorities under Income Tax Act. Therefore, the view taken by the Assessing Officer and the Ld. CIT(A), solely relying on the deduction of tax at source u/s 194J of the Act that the payments receipts by the assessee were in the nature of professional fees, falls short of the requirements necessary to arrive at such a conclusion. The Assessing Officer and the Ld. CIT(A) ought to have independently examined the nature of the receipts and arrived at their own conclusion o....