The Income Tax Appellate Tribunal (ITAT) Mumbai bench held that no addition should be made under Section 44ADA of the Income Tax Act, 1961 towards the income earned from the business of consultancy service.
The assessee had only the qualification of 10th standard; he did not have any qualification to act as a legal, medical, engineering or architectural professional or professional accountancy or technical consultancy.
Jitendra Singh appeared for the assessee and. Naganath B. Pasale appeared for the revenue.
Assessee, Vishnu Dattatraya Ponkshe filed his income under Section 44AD of the Income Tax Act showing its income @8% on receipts of Rs.8,30,800/- from the business of consultancy qua stamp duty and registration. The amount of Rs.8,30,800/- included the receipt of Rs.4,81,280/- on which TDS was deducted under Section 94J of the Income Tax Act.
During the assessment proceedings AO added the income @50% under section 44 ADA of the Act, which resulted into making the addition of Rs. 2,40,640/-.
Aggrieved against the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeal) [CIT(A)] who dismissed the appeal. Therefore the assessee filed another appeal before the tribunal.
During the proceedings tribunal observed that as per provisions of Section 44ADA of the Income Tax Act, which in fact deals with persons carrying on legal, medical, engineering or architectural profession or profession of accountancy, technical consultancy or interior decoration or any other profession as is notified by the Board in the official gazette.
In the instant case Assessee has passed 10th/matriculation and does not have any qualification to act as a legal, medical, engineering or architectural professional or professional accountancy or technical consultancy of interior decoration or any other profession as is notified by the Board in the official gazette.
Therefore, the assessee’s case does not fall under the provisions of Section 44ADA of the Income Tax Act, the tribunal noted.
After considering the facts and circumstances, the two member bench of B.R. Baskaran (Accountant Member ) and Narender Kumar Choudhry (Judicial Member) deleted the addition made under Section 44ADA of the Income Tax Act.
Therefore the bench allowed the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
