Land Mark Decision of Hyderabad Bench of ITAT

Dear All,

A landmark decision of Hyderabad Bench of ITAT is added below.

We must thank Adv. Subash Agarwal (Kolkata) for bringing the decision to our notice.

We have change the way we interprete the concept of 'Income from Business'. As per the Honourable Hyderabad Bench, we don't have to go to section 30 to 38 for claiming the deduction of direct expenses. Those are embeded in section 28 itself. As under section 28 what is taxable is 'Profit from Business' and profit can be arrived at only after deducting expenses.  

Thanx Adv. Agarwal any way!

Regards

CA. Sunil G Ingale

9850058855

 

Dear All, The query raised by Suru Venkateswarlu is relevant in the context of sec. 40(a)(ia). Recently, Hyd. Bench of ITAT held that payment of direct expenses like labour charges are not covered by sec. 30 to 38 but falls under sec. 28(i), which deals with chargeability of income under the head "Business". Sec. 40 starts with the nonobstant clause "Notwithstanding anything to the contrary in ss. 30 to 38". Therefore, mischief of sec. 40(a)(ia) does not apply to claim of direct expenses like labour charges. This was held in the case of K. Srinivas Naidu V. ACIT 131 TTJ 17(Hyd. Bench)

Regards, Subash Agarwal, Advocate 1, Gibson Lane, Room No. 213 Kolkata – 700069 (M) : 9830052141