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TMI Blog2025 (5) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... dual and a doctor by profession. She is daughter of Shri Nara Suryanarayan Reddy who is a managing partner in the firm namely M/s Sree Raghavendra Enterprise and M/s Indian Minerals & granite company. For the year under dispute, the assessee filed return of income as per section 139(1) of the Act declaring total income at Rs. 1,17,60,980/- which included professional income declared u/s 44ADA of the Act, income from house property and income from other sources. 3. A search under section 132 of the Act was carried out as on 12th March 2020 in connection with M/s Sree Raghavendra Enterprise group including the residential premises of the assessee in the impugned search. 4. In consequence to the search, the proceeding under section 153A of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought the entire amount of Rs. 12 lakhs to the taxable income. 8. The aggrieved assessee preferred an appeal before the learned CIT(A). The assessee with the appeal filed statement of facts, explaining the facts and argument against the view taken by the AO. 9. However, the learned CIT(A) dismissed the appeal of the assessee without going into the merit by holding that the assessee is not keen to pursue to the appeal. The view of the learned CIT(A) was based on the fact that there were two notices issued during the appellate proceedings to which the assessee failed to submit response. 10. Being aggrieved by the order of the learned CIT(A) the assessee is in appeal before us. 11. The learned AR for the assessee respectfully submits tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofessional income. The TDS on the consultation fees was rightly deducted under section 194J by M/s Dr. Jayachandran & Co Hospital and not under section 192, reaffirming the professional nature of the income. 15. In light of the above submissions, the learned AR humbly prayed that the impugned additions be deleted, and the assessment be set aside. 16. On the contrary, the learned DR vehemently supported the order of the authorities below. 17. We have heard the rival contentions of both the parties and perused the material available on record. The facts of the issue on hand have been elaborately discussed in the processing paragraph, therefore we are not inclined to repeat the same for the shake of brevity. 17.1 At the outset, we find it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial unearthed during the search. In the present case, the year under consideration i.e. A.Y. 2018-19 is an unabated assessment as the time limit to issue notice under section 143(2) of the Act was already expired on 30th September 2019 whereas the search was conducted as on 12th March 2020. Hence, the validity of the proceedings under section 153A of the Act on this count also is vitiated. 17.3 On the merits of the assessment, we note that the AO has erroneously treated the sum of Rs. 12,00,000/- received by the assessee from Dr. Jayachandran & Co Hospital, Chennai, as salary income, thereby disallowing the benefit of section 44ADA which allows for presumptive taxation of professional receipts. The AO's assumption that a fixed monthly pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g them on facts and law, which was not done in this case. 17.6 In view of the above detailed discussion, we hold that the proceedings under section 153A are invalid in the absence of a valid search warrant in the name of the assessee. The assessment is also, in the absence of incriminating material found during the search is not sustainable being unabated assessment year. We further hold that the income received by the assessee from Dr. Jayachandran & Co Hospital was in the nature of professional fees and not salary, hence eligible for presumptive taxation under section 44ADA of the Act. Accordingly, we hereby set aside the finding of the ld. CIT(A) and quash the assessment order. Hence the ground of appeal of the assessee is hereby allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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