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2011 (2) TMI 794 - ITAT, MUMBAIManagement consultancy firm - Receipts of hire charges of office equipments/ motor cars/ furniture/etc, as business income - income from profession treated as income from other sources since no activity of management consultancy was carried on during the year – dis-allowance of interest and remuneration to partners and other business expenditures – Held that:- Since in preceding assessment years such hire charges were accepted as business income hence, there should be consistency in the approach. Regarding income from profession it is held that assessee is following cash system of accounting and amount received are the arrears of the consultancy fees of previous A.Y.s . It is to be assessed under the head “income from business or profession” as very nature of the receipt will not be changed, even if the actual payment is deferred. In respect of expenditure since hire charges and management consultancy fees are treated as business income such expenditure would be allowed. However, for the purpose of verification and quantification whether the assessee has provided the interest on the partner’s capital account as per terms of Deed of Partnership, the file restored back to the A.O.- Decided partly in favor of Revenue for statistical purposes.
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