| |
| The Tax Publishers2020 TaxPub(DT) 3670 (Mum-Trib) INCOME TAX ACT, 1961
Section 263
Dividends on shares except in the case of an assessee dealing in shares, Income by way of interest unless assessable as business income and Share of profit of a partner of a firm in the total income of firm excluded from his total income under section 10(2A) once, the above items which appeared in the capital account of assessee were excluded, then gross receipts from business carried on by it shall not exceed the monetary limits specified under section 44AB, therefore, assessee would not be liable to deduct tax under section 194A and order passed under section 263 by CIT was set aside.
|
Revision under section 263 - TDS under section 194A - Non-deduction of TDS on interest expenses - Provisions of section 44AB applicability on assessee
Assessee filed his return of income and assessment under section 143(3) was completed by AO. CIT, on perusal of records observed that the assessee has received unsecured loan from various parties and paid interest thereon, whereas no details of tax deducted at source (TDS) on such interest expenses under section 194A r.w.s. 40(a)(i) were shown in audit report. CIT was not convinced with the reply of assessee for the reason that prima facie, assessee was engaged in the business of finance as he had earned interest income on his loans and advances, which is almost 65% of his total amount credited in his capital account. Assessee was required to get his accounts audited under section 44AB. CIT set aside the assessment order passed by AO under section 143(3). Held: In case of a person carrying on business, if total sales, turnover or gross receipt in business in the previous year relevant to the assessment year exceeds Rs. 1 crore, then he is covered by provisions of compulsory audit under section 44AB. Even in a case of an individual carrying on business as a sole proprietor, it is necessary to comply with the provisions of section 44AB only in respect of his business income. Dividends on shares except in the case of an assessee dealing in shares, Income by way of interest unless assessable as business income and Share of profit of a partner of a firm in the total income of the firm excluded from his total income under section 10(2A) once, the above items which appear in capital account of assessee were excluded, then the gross receipts from business carried on by it shall not exceed the monetary limits specified under section 44AB during the financial year 2013-14 relevant to the assessment year 2014-15. Assessee would not be liable to deduct tax under section 194A and order passed under section 263 by CIT was set aside.
Followed:Ghai Construction v. State of Maharashtra & Ors. (2009) 184 Taxman 52 (Bom) : 2009 TaxPub(DT) 0072 (Bom-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2014-15
IN THE ITAT, MUMBAI BENCH
 SUBSCRIBE FOR FULL CONTENT
|