TMI Blog2020 (9) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... income; it would not be necessary to comply with the provisions of section 44AB in respect of his other income as explained in Ghai Construction v. State of Maharashtra 2007 (4) TMI 763 - BOMBAY HIGH COURT The term gross receipts is not defined in the Act. It will include all receipts whether in cash or in kind arising from carrying on of the business which will normally be assessable as business income under the Act. The Guidance Note on Tax Audit u/s 44AB of the Income Tax Act, 1961 (Revised 2013 edition), issued by the Institute of Chartered Accountant of India, New Delhi, mentions inter alia that the following items, relevant in the instant case, would not form part of gross receipts in business for purposes of section 44AB. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 30.10.2016 determining the income at ₹ 27,14,237/-. The Pr. CIT, on perusal of records observed that the assessee has received unsecured loan of ₹ 6,56,48,896/- from various parties and paid interest thereon of ₹ 1,44,59,214/-, whereas no details of tax deducted at source (TDS) on such interest expenses u/s 194A r.w.s. 40(a)(i) are shown in the audit report. In response to the show-cause notice issued u/s 263 of the Act, the assessee filed a reply dated 22.03.2019. However, the Pr. CIT was not convinced with the said reply for the reason that prima facie, the assessee is engaged in the business of finance as he has earned interest income of ₹ 65,51,040/-on his loans and advances, which is almost 65% of his tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total receipts of ₹ 1,03,59,083/- (₹ 2,46,40,357/- minus opening balance of ₹ 1,42,81,274/-). It consists of remuneration (₹ 14,71,942/-), interest on capital(₹ 11,18,263/-), agricultural income (₹ 9,03,306/-), bank interest (₹ 9,654/-) , dividend (₹ 1,703/-) share of profit (₹ 8,05,577/-), dividend bank (₹ 60,000/-), interest income (₹ 54,32,777/-) and other income (₹ 5,55,860/-). The provisions of section 194A were amended from June 1, 2002 to provide that an individual or a Hindu Divided Family, whose total sales, turnover or gross receipts from the business or profession carried on by him exceed the monetary limits specified u/s 44AB during the financial year imm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of profit of a partner of a firm in the total income of the firm excluded from his total income u/s 10(2A) of the Income Tax Act. Once, the above items which appear in the capital account of the appellant are excluded, then the gross receipts from business carried on by it shall not exceed the monetary limits specified u/s 44AB during the financial year 2013-14 relevant to the assessment year 2014-15. As a consequence, the appellant would not be liable to deduct tax u/s 194A of the Act. In view of the above factual scenario and position of law, we set aside the order u/s 263 passed by the Pr. CIT. 5. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 03/09/2020. - - TaxTMI - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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