Section 44 AD for coaching/ teaching classes by Dentist

Section 44 AD for coaching/ teaching classes by Dentist

Will be grateful if the following can be responded with either/or 
 (a) supporting Citations and/or 
(b) Strong compelling argument 
As tomorrow ie 10th April (Wednesday) is the appearance before the ITO.
Best Wishes,
Thanks.

*CASE* 
* A Dentist couple (MDS & specialists in a Particular branch of Dentistry)started practice under xyz Clinic (Name) in the evening after the Day time college working hours( it’s Legally permitted).
* They were Asst Professors in Dental college as well, where they were teaching.
* The Dental Practice didn’t pick up early in their career, therefore they started teaching & coaching classes for BDS students, Coaching for MDS entrance exams, small short term skill development classes in their own branch for practising Dentists for Indian and Foreign Students from Middle East, along side their Dental practice.
*All the income has been reflected as:
# Salary from college (TDS done)
# Dental clinic income u/s 44 ADA ( Tax paid accordingly)
# Coaching classes income u/s 44 AD ( Tax paid accordingly)
Any thing wrong in this?Please advice and send supporting citations and/or Strong arguments for what they did was correct or wrong.

Asked 5 years ago in Income Tax

What is the query raised by AO?

AO generally don't take into consideration the case law Unless and until it's of their own ITAT or high court, AO only works on facts and paper.

I don't think you have done anything wrong by showing income from college as salary income, income from dentist profession under 44ADA and income from teaching students under 44AD.

But generally if it's not a registered classes tuition receipt is shown as income from other sources and not as business income.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo

CA, Jaipur

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- Income tax is concerned with the proper disclosure of income and taxes paid on it.

- Doing whole time employment along with practice is matter of regulation governed by IMA. If it is legal as per IMA then there is no issue.

- There is nothing wrong in it but citations and case laws will be provided once I know the opinion of the AO.

Vivek Kumar Arora

CA, Delhi

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Only the coaching class income has not been taxed correctly. Income from coaching class cannot be taxed under any of the presumptive taxation schemes. The ITO shall tax such income disallowing the presumptive taxation claim.

Lakshita Bhandari

CA, Mumbai

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Dear Sir,

Hope you are doing well !!

Nothing is wrong in it except income from coaching classes.

It should be shown under the head income from other sources.

If tuition is their only profession then Income from tuition will be their main source of income and taxable under the head Income from Business/Profession. However, if they are in receipt of any other main source of income like salary income, house property income or income from other business and in addition to this they are giving tuition, then such tuition income will be taxable under the head “Income from other Sources.

Thanks & Regards,

Payal Chhajed

CA, Mumbai

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You have to declare Coaching Income as Other sources Income,As Dental practice being your main Source of Income and you declared Income under PTS ,so Coaching income cannot be declared under 44AD.

Hope it helps

Swati Agrawal

CA, Mumbai

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