if an assessee is showing profits under 44AD, then will the sections 40 to 43C apply to him? as the language of section 44AD reads as
" Notwithstanding anything to the contrary contained in section 28 to 43C" and not as "Notwithstanding anything contained in section 28 to 43C".
Further it is specifically said that all deduction u/s 30 to 37 are deemed to have been allowed
if the lawmakers had the intent to not apply 40 to 43C, then it would have been given specifically.
Direct tax
Replies (7)
the interpretation of the provision could be that the sections 40-43 are applicable even in case of section 44AD also , only in case anything is in contrary to provisions of 44AD , 40-43 is not applicable
that is what I also understood but many authors interpret that 44AD overrides 28 to 43C. Even Vinod Gupta module says so. But I think this interpretation is not correct
if it override 40-43 also fully , then it will be a big loophole in the act, since related party transactions are covered in section 40A(2)
Exactly.. I totally agree 👍
but in practical
disallowance attract when actual deduction claimed
but in 44ad presumtive taxation 33 to 37 deemed to be allowed. so my opinion we cant give effect of disallowance of deemed deduction.
disallowance attract when actual deduction claimed
but in 44ad presumtive taxation 33 to 37 deemed to be allowed. so my opinion we cant give effect of disallowance of deemed deduction.
By prescribing a rate as low as 8%, it is deemed that all the deductions covered u/s 30 to 37 are allowed, then why can't the disallowance be attracted??
intent of lawmaker is clear that no expenditure will be allowed from 8% presumed income computed.
Thts why he put clause of deemed allowed.
we can interpret the word deemed allowed only if legally allowable
Thts why he put clause of deemed allowed.
we can interpret the word deemed allowed only if legally allowable
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