Section 44A of the Income Tax Act
Income-tax Act, 2025: s.50
Section 44A of the Income-tax Act, 1961 corresponds to section 50 (Special provision in case of trade, profession or similar association) of the Income-tax Act, 2025.
Read section 50 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 44A is Saroj Kumar Mazumdar v. CIT (37 ITR 242), cited in 31 of the 34 judgments on BharatTax that turn on this section.
Leading authorities on Section 44A
An isolated transaction, even if not part of the assessee's regular business, can be considered an adventure in the nature of trade if it bears clear indicia of trade. The fact that a transaction is not in the ordinary course of business does not change its character.
A purchase made without the intention to resell, where a resale occurs due to changed circumstances, is considered a realization of capital and does not make the transaction a business venture. However, if a purchase is made with the intention to resell, the nature of the venture (capital account or trade) depends on the assessee's conduct and case circumstances.
