Interest and remuneration income from partnership firm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 March 2014 SIR,

IS THERE ANY SPECIFIC CASE WHERE AUDIT UNDER 44AB IS APPLICABLE JUST BECAUSE OF INTEREST AND REMUNERATION INCOME RECEIVED FROM A PARTNERSHIP FIRM? IF THERE ARE ANY SUCH CASE THEN PLZ SHARE...

THANK YOU IN ADVANCE...

Nikhil Kaushik

Nikhil Kaushik (Expert)
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04 March 2014 well if you are receiving just interest and remuneration, then no audit is applicable. even though we do consider such receipts as income from business and profession, there is no need for audit. The same can also be appreciated from the fact that ITR3 (applicable to partners having no business income in proprietor business) doesnt even have any reference to 44AA and 44AB.

However, certain experts have opined that once you include something in business receipts, 44AA and 44AB should naturally apply and mere not asking for said info in ITR3 cannot cast any different meaning to the provisions of section 28. They also argue that partners should also have option of offering such income under 44AD. This view was offered in recent Chartered Accountant Journal january 2014 edition.

So you need to pick your view and back it up.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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04 March 2014 since you were looking for case law talking about applicability of tax audit, please refer Usha Narayanana vs DCIT (ITA 703/kol/2012).

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