| Question And Answer | |
|---|---|
| Subject: | Interest on advances and applicability of Sec 44AD. |
| Category: | Income-Tax |
| Querist: | Govind Agrawal |
| Answered by: | Research Team |
| Tags: | change of opinion, Interest, Reassessment |
| Date: | April 4, 2024 |
Assesse has been carrying on the business of lending money on interest, he has offered the income of interest u/s Section 44AD at 88% against the statutory requirement of 6%.
12% of the income have been incurred on expenses such as Bank charges, Depreciation, insurance of Car and its running expenses, salary of accountant/manager and Telephone Expenses.
The case have been reopened for the A.Y. 2020-21 u/s 148 of the I.T Act, 1961 on the ground that income should have been offered under the head of Income from Other sources.
Query:
Whether the action of the A.O is justified?
Any Case Laws on the issue.
The action of the Assessing Officer is not justified . One has to study whether the reopening notice is issued by following the due process of law . If the assessment was completed earlier under section 143(3) , whether any specific question was raised in the course of assessment . Even under the new provision reassessment due to change of opinion is not permissible . For carrying of business of money lending the Money lending licence is not a requirement . Refer Hasmukh Estates Pvt Ltd v. ACIT (2023)459 ITR 524/(2024) 158 taxmann.com 543 ( Bom)(HC), Siemens Financial Services Pvt Ltd v. Dy.CIT ( 2023) 457 ITR 647 /154 taxmann.com 159 (Bom)( HC) www.itatonline .org