Section 44ab applicability
This query is : Resolved
CA Anant Dingare
(Querist)
31 January 2015
my client is running a hospital in partnership having 5 partners of which 3 are professionals (Doctors) and 2 are non professionals, tell me weather for tax audit it will be treated as professional or other business? for applicability of 44AB gross receipts weather consider Rs. 1 Cr of Rs. 25 Lacs ? at what limit Section 44 AB will be applicable ?
Nikhilesh Kataria
(Expert)
31 January 2015
Where the assessee firm is running a multi speciality hospital where doctors are providing consultancy services, the same will be covered under business activity and not treated as profession. Therefore, limit will accordingly be Rs.1 crore as per the provisions of section 44AB. You may refer to the decision of Dr Deepak Asudani vs. ITO 26 DTR 454 (Del)
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31 January 2015
Since 2 out of 5 are non-professionals, the partnership should be considered as 'business' for tax audit purposes.
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CA Anant Dingare
(Querist)
02 February 2015
Thank you sir for your expert advice.
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