The Tax Publishers2021 TaxPub(DT) 0006 (Mad-HC) : (2021) 430 ITR 0391

INCOME TAX ACT, 1961

Section 44AD

Receipts on account of remuneration and interest from the firms could not be construed as gross receipts mentioned in section 44AD. Accordingly, assessee cannot declare income taking benefit of section 44AD in respect of remuneration and interest from the firms.

Presumptive taxation under section 44AD - Gross receipts - Assessee seeking benefit of presumptive rate of tax by treating remuneration and interest received in the capacity of partner of firm as gross receipt -

Question for consideration was whether interest and salary received by assessee from firms in which he was a partner could be construed as gross receipts mentioned in section 44AD. Held: Section 44AD, the words used are 'total turnover' or 'gross receipts' and it pre-supposes that it pertains to a sales turnover and no other meaning can be given to the said words and if done so, the purpose of introducing section 44AD would stand defeated. That apart, position becomes much clearer if one takes note of sub-section (2) of section 44AD which states that any deduction allowable under the provision of section 30 to 38 for the purpose of sub-section (1) be deemed to have been already given full effect to and no further deduction under those sections would be allowed. Thus, conspicuously section 28(v) has not been included in sub-section (2) of section 44AD which deals with any interest, salary, bonus, commission or remuneration, by whatever name called, due to or received by, a partner of a firm from such firm. Therefore, receipts on account of remuneration and interest from the firms could not be construed as gross receipts mentioned in section 44AD.

REFERRED :

FAVOUR : Against the assessee.

A.Y. :



IN THE MADRAS HIGH COURT

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