TAX Doubt

it wont be a business income as it was his father's business which i assume is discontinued...so it will be taxable under IOS i think..

Section 41(4) on bad debts recovery states that where a deduction has been allowed in any earlier  year and the bad debts is subsequently recovered , the amount so received shall be deemed to be the business income and chargeable to tax.

However, in case of PK Kaimal it was decided that were any amount is received in PY that was allowed as deduction for bad debts in any earlier year but where there is change in asssesse  the amount would not be taxable and the same would be deemed to be Capital Receipts not liable to tax..

The same would apply here as well.

P K kaimal case does not applied in above case. in p k kaimal case a partnership firm dissolved and afterwards p k kaimal runs the the business as proprietorship thus the assesse not the same. 

In the above case it is case of legal heir/inheritance thus the assesse is continued as per section 41 (4) and thus it is a taxable income in the hand of assessee.

according to me bad debts recovered from discontinued business of father...it is chargeable to tax u/s 176(3A), being a receipt from discontinued business......section 41(4) not applicable.........

Yuvraj Shreekant Sharma....reason for not applicable of section 41(4)-----the assessee has received rs.50000 as bad debts written off by his father relating to electronic goods business....as the assessee is not carrying on the same business, he can not be taxed for the sum received....unless the same business is succeded, no amount can be treated as deemed income u/s 41(4).....

reason--- why section 176(3A) is applicable--------

where any business is discontinued by reason of the retirement of death of the person carrying on such business, any sum received after the discontinuance of the business is deemed to be the income of the recipient and charged to tax in the year of recipt.....

so dis income is taxable under the head of income from business nd profession........

sneha bagla------it wont be a business income as it was his father's business which i assume is discontinued...so it will be taxable under IOS i think..,,

answer-----u read my above two reply.....

now wat ur answer.....ye b&p me taxable hogi....ok........

tc......my all fnds.........

YOU HAVE REPLACED THE WORD PROFESSION TO BUSINESS REFER TO SEC. 176 (4).

I THINK I AM CORRECT  

yes dinesh u r correct...but my dear bro mene section 176(3A) ka provision likha h......

section 176(3A) related to business.......nd 176(4) related to profession.//////

now i think u agree with me......if u have ny doubt plz post ur reply....or u have ny suggestion plz post....

i think now i clearify both sections....

[(3A) Where any business is discontinued in any year, any sum received after the discontinuance shall be deemed to be the income of the recipient and charged to tax accordingly in the year of receipt, if such sum would have been included in the total income of the person who carried on the business had such sum been received before such discontinuance.]

(4) Where any profession is discontinued in any year on account of the cessation of the profession by, or the retirement or death of, the person carrying on the profession, any sum received after the discontinuance shall be deemed to be the income of the recipient and charged to tax accordingly in the year of receipt, if such sum would have been included in the total income of the aforesaid person had it been received before such discontinuance.

read section 176 3A and 176 4 now i think that may come know the wordings of  thses section. u have written wordings of 176 4 wherein profession is replaced by business

Originally posted by : Nitin Hotchandani
	sneha bagla------it wont be a business income as it was his father's business which i assume is discontinued...so it will be taxable under IOS i think..,,   answer-----u read my above two reply.....   now wat ur answer.....ye b&p me taxable hogi....ok........   tc......my all fnds.........

oki...i havent read sec 176(3A)  yet actually.....so this is something new to me..thanks for clearifying..

ya it will taxable under income from business and profession