Santosh Parsad, aged 30 years, a high school passed boy, by filing its return of income, u/s 44AD of the Income Tax Act shows its income @ 8% on receipts of ₹ 28,30,800 from the business of running a stationery shop and

The matter was decided in the similar case of ITAT Mumbai bench vide case "ITA No. 1570/Mum/2023 (Assessment Year: 2017-18) Shri Vishnu Dattatraya Ponkshe Vs. Central Processing Centre Bengaluru". The Assessee being aggrieved, challenged the said addition before the learned Commissioner, who by taking into consideration that all the deductor's are big corporates and deducted tax under section 194J of the Act, construed that the receipts of said amount related to professional and technical services and is covered under section 44ADA of the Act and therefore taxable @50%. The Ld. Commissioner ultimately computed the total income of the Assessee @ 50% on which TDS has been deducted u/s 194J and 8% on the remaining amount. The Assessee being aggrieved and filed the appeal before ITAT Mumbai, the bench heard the parties and perusing the material available on record and giving thoughtful consideration to the peculiar facts and circumstances of the case, observe that the amount on which TDS was deducted under section 194J of the Act, in fact is part of the total receipt on which the Assessee has declared income @8% under section 44AD. However, both the authorities applied the provisions of section 44ADA of the Act, which in fact deals with persons carrying on legal, medical, engineering or architectural profession or profession of accountancy, technical consultancy or interior decoration or any other profession as is notified by the Board in the official gazette. Admittedly the Assessee is just a 10 th / matriculation passed and do not have any qualification to act as a legal, medical, engineering or architectural professional or professional accountancy or technical consultancy of interior decoration or any other profession as is notified by the Board in the official gazette, as prescribed under section 44AA of the Act. As the Assessee's case does not fall under the provisions of section 44ADA of the Act and therefore the addition sustained by the learned Commissioner is liable to be deleted. In this case, Mr. Santosh Prasad, a high school boy, show 8% on receipt of ₹ 28,30,800 from business of running a stationery shop and online small service like stamp paper printing, Aadhar updating, passport related services etc. The amount of ₹ 28,30,800 included the receipt of ₹ 3,15,800 on which TDS u/s 194J (fees for professional services). The assessing officer added the receipt of ₹ 3,15,800 @ 50% as income u/s 44ADA. The facts are similar to the facts of the above decided case. Accordingly, the action of AO may not be valid.