I would appreciate getting expert views in respect of 44 ADA Presumptive taxation rules:
1. If annual consultancy income is upto Rs. 50 lakhs, then a Resident Assessee can avail the provision of 44 ADA and would be required to pay Income Tax only 50% of the income and rest 50% would be taken as expenses. There is no requirement of maintenance of accounts for this purpose.
Suppose there are negligible withdrawals from the bank account (say only upto 10% of the total consultancy income), can the Assessing Officer question the logic/support of claiming 50% expenses?
Are there any decided cases on this subject which can be referred to / relied upon.
2. Can a salaried person be also a free lancer professional and declare income both under the head "Salaries" and "other income" where presumptive taxation provision is used for the other income if it is towards professional services.
3. What is the meaning of Technical consultancy for the purpose of Section 44 ADA. Does Insurance claim consultancy / consultancy for taking up case through Arbitration process (but not as a qualified advocate) fall under it as insurance is a technical subject. It also requires legal knowledge, though not necessarily a law degree.
4. If HUF has insurance consultancy income, pays 10% of its total income to an insurance professionals and retains the balance for it, can the Assessing Officer club the income with the income of Karta on the ground that it is not a business, it is a professional service which cannot be done by HUF.
Are there any precedents / decided cases on this subject which can be referred to / relied upon.
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