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Determination as profession for section 44ab

K Sreeharsha (CA Final) (54 Points)

30 November 2011

Hi can anyone help me out whether the Merchant Navy Captain can be considered as Professional for the purpose of subjecting him to 44AB his receipt is 40Lakhs p.a.

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6 Replies

Yogesh Bhandari (CA FINAL Student) (429 Points)
Replied 30 November 2011

Merchant Navy Captain can not be considered as Professional as it is not covered by definition of Professional services of Sec.44AB

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K Sreeharsha (CA Final) (54 Points)
Replied 30 November 2011

Thanks Yogesh but the terms of his appointments says he is appointed as a Management Consultant and he has service tax registration too for providing such service under Management Consultancy Services. Will this ST Registration and terms of Agreement make any difference to your opinion on 44AB applicability.

Yogesh Bhandari (CA FINAL Student) (429 Points)
Replied 30 November 2011

Sec. 44AA provides that every person carrying on the legal, medical, engineering or
architectural profession or accountancy or technical consultancy or interior decoration or any
other profession as has been notified by the Central Board of Direct Taxes in the Official
Gazette are covered for professional....

The professions notified by CBDT so far are as follows :
The profession of authorised representative; the profession of film artiste (actor, camera man,
director, music director, art director, editor, singer, lyricist, story writer, screen play writer,
dialogue writer and dress designer); the profession of Company Secretary; and information
technology professionals.

So, for the purpose of Sec. 44AB merchant Navy captain not considered for professional and hence, the limit is 60 lakh for non-professional,, so he does not covered for TAX Audit...

The ST Registration and agreements does not Change the view of Sec. 44AA & 44AB

satish kumar voleti (A.C.A., (ICWAI)) (1686 Points)
Replied 30 November 2011

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 707 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.

so for Merchant Navy Captain it is not applicable.

even though he is appointed as a Management Consultant the can not be considered as Professional hence the provision do not apply.