44ADA for LLP

Page no : 2

Dinesh Singh (Student) (340 Points)
Replied 26 July 2020

Circulars issued by Board under Section 37B are binding on the Department and it cannot take a stand contrary to the instructions issued by the Board. However, an assessee can contest the validity or legality of such instructions on court but not in ITR.

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 26 July 2020

"The scheme will apply to such resident assessee who is an individual, Hindu undivided family or partnership firm but not Limited Liability partnership firm."

it's also mentioned in Memorandum to FINANCE BILL, 2016 at time of introduction of Sec 44ADA but not in FINANCE ACT, 2016 Passed in parliament.

What is the validity of same because it's only mentioned in Memorandum to bill not in Act?

Dinesh Singh (Student) (340 Points)
Replied 26 July 2020

"True intention of legislature" has to be considered while interpreting the legal meaning of statutory provisions and Memorandum to bill shows the true intention of the legislature.

The same restriction to LLP will also be considered by the court while interpreting the true intention of the law. Plain vanilla reading of the act does not help always to find out the intention of legislature or lawmaker.

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 26 July 2020

"The same restriction to LLP will also be considered by the courts"
Is there any ruling / judgement / case law of Judicial Authority,Appellate Authority, Court (Highcourt/Supreme court).
Thanks in advance

CA Payal Gupta (Chartered Accountant) (154 Points)
Replied 26 July 2020

Hi Everyone,

Section 44ADA is applicable to Resident assessee being Individual, HUF, Partnership Form (Excluding LLP).

Please see a relevant extract of Memorandum explaining provisions of FInance bill passed in 2016:

"In this regard, new section 44ADA is proposed to be inserted in the Act to provide for estimating the income of an assessee who is engaged in any profession referred to in sub-section (1) of section 44AA such as legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette and whose total gross receipts does not exceed fifty lakh rupees in a previous year, at a sum equal to fifty percent. of the total gross receipts, or, as the case may be, a sum higher than the aforesaid sum earned by the assessee. The scheme will apply to such resident assessee who is an individual, Hindu undivided family or partnership firm but not Limited Liability partnership firm".

Ravi SADhiyan (Practice) (4510 Points)
Replied 26 July 2020

THANK YOU ALL RESPECTED MEMBER FOR GOOD DISCUSSION IN SECTION 44ADA

vinay velani (2 Points)
Replied 27 November 2020

Last year ie AY 2019-2020 there was no restriction and LLP could file return offering in come u/s 44ADA. However this year dept have restricted in the ITR..