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The issue is whether professionals like Doctors,Advocates and Engineers are covered under the new method of presumptive profit. The words gross receipts  is identified with the term business and it may not include professional  receipts.

please contribute your views

In the case of  a firm  that carried on construction activity and upon completion ,it has retained some of  the property ,which is let out ,on a sizable rent . Whether remuneration and interest to partners is available against the property income?

Whether a firm without any previous business activity purchases a property and earns rental income,deduction u/s.40(b) is allowable? Would the schedular system of taxation entitle the firm to the above  claim

Please give your response.

there is no change in aggregation of income u/s.64 nor sec.56 mitigates the sec.64.clubbing of income continues witthout any chanage

the non-payment of TDS by an assessee entails disallowance of the expenditure.In a case , where the receipient already paid tax and filed its return, the  TDS liability is abated u/s.191 Whether the disallowance u/s.40(ia)is still applicable because  during the relevant previous year there existed liability to make TDS.That once the payee paid the tax and there is no need for making TDS as per the sec.191,it must satisfy the requirement of sec.40(ia).In other words , there is no separte liabiity to make TDS  u/s.40(ia).This provision needs elaboration and the opinion of my learned brethern and  any judgments sofar may please be posted at the earliest.
thank you
c.sai prasad.

addition on 24,11.2008


Sec.40a(ia) doesnot disallow the corresponding expenditure but provides that if the TDS is paid in the subsequent years,exp.would be allowed in that subsequent year.Therefore,it implies that where the payee didnot pay tax and the liability to make TDS remians on the payer,it must be paid though in a subsequent year in order to get deduction.Otherwise,making TDS  where payee already paid directly would  amount to paying tax twice and it is not intended.It looks unconvincing that even if payee had  already paid tax, the payer in order to get deduction must make another payment of TDS in favour of the payee.This needs to be kept in view in evaluating the issue.

thanking you
c.sai prasad.

i feel the issue is squarely covered  by sec.49(1) and explanation thereunder.The said provision envisages in the case of property received by way of will or other modes,the cost of acquisition shall be the cost to the previous owner.The explanation to the sec.2(42A)  provideds that in reckoning the period of holding of capital asset,the period held by the previous owner in respect of the transactions covered under sec.49(1) shall also be added to the peirod held by the transferor i.e.assessee. I think the matter is covered in the statute itself.
c.sai prasad.

 the rule 6DD(k) postulates that cash payment made by a princiapl to his agent ,who is required to pay  cash for goods and services on behalf of the principal,shall be an exception to the mandatory application of sec.40A(3) of the I.T.Act.
Whether any payment made by agent in cash  and claimed by him that he is required to do so would bring it within the above said rule?or Whether the payments enlisted under the subrule ( a)  to (l) made by an agent on behalf of the principal are only covered?

I personally feel any payment if made by an agent to  meet cash payments must fall under exception. Views of my esteemed colleagues are welcome.

A partner in a firm borrows money and invested in the firm.The firm doesnot pay interest but discloses income and pays tax in its hands u/s.167B.Whether interest paid by the partner on borrowed capital for the year is allowable as deduction in view of payment of tax by the firm on the income. The firm ,in law and for incometax purposes, is only compendious name given to partners.Whether restriction ui/s.14A comes in the way of claim by partner in view of the principle that payment of tax by the firm tantamounts to payment by its partners.An opinion is requested from my esteemed colleagues.

i feel that the original stand of the assessee that they are advances needs to be proved.Whether there are sales made in the year or the subsequent year and the advances were adjusted against sales.Such evidence ,if available should be led to prove that they are advances against sales .In case no such evidence is forthcoming ,they stand as cash credits and the same should be proved by way of confirmation letters from creditors as identity and the capability of the creditors,need tobe established,as has been the settled law.

llife time tax on cars is revenue in nature but the I.T.Dept is of the view that there is enduring advantage for long periiod and it isnot revenue in nature.