Background: See the wordings of the two acts:
44 AD
(6) The provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to—
(i) a person carrying on profession as referred to in sub-section (1) of section 44AA;
(ii) a person earning income in the nature of commission or brokerage; or
(iii) a person carrying on any agency business
44AA. (1) Every person carrying on 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 shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act.
These are relevant portions of the bare act. If a non-professonal has set up a nursing home. It is a profession that is defined under 44 AA (1)(nursing fileds maybe considered as coming under the field of "medicine"). One could argue that the non-professional is not "carrying" out the medical profession here ie he himself is not carrying out and he merely has setup an enterprise which in turn will carry out the profession....YES...one could argue like this.
I have seen multiple tribunal judgements and court judgements like this wherein it has been ruled that even those establishments run by doctors themselves should be considered as a business. But this particular point is the regarding the applicability of 44 AD. Subsection (6) says that a person engaged in profession defined in 44 AA(1) cannot use 44 AD.
Q.1Therefore even if i being a doctor run a grocery store, am i or am i not eligible for using 44 AD?
Q.2, If a non professional is running a business set up which is in the medical field ( a nursing home), can they adopt 44 AD? The judgements have termed nursing homes as a commercial set up and as a business. Saying so doesn't automatically impart 44 AD benefits. ITD could say-yes "its a business, but still not eligible for 44 AD because the person is carrying out a profession mentioned in 44 A (1)!" Of course...there is a scope for fighting this out (if it comes to that). But i want the opinion of experts here regarding applicability of 44 AD in this scenario-any court judgements or better yet an FAQ saying so by the ITD themselves
Q.3 Can i being a doctor, run a diagnostic centre (myself not being the expert; i will hire professionals for that) and claim it as "business income"(atleast)?
CAclubindia
