Rina Radha Madhab Jena Vs Assessment Unit Income Tax Department / DCIT (ITAT Mumbai)
Once Section 44AD Presumes the Profit, AO Cannot Audit Every Rupee Through Sections 69A & 69C—ITAT Deletes ₹20.39-Lakh Double Additions
Facts of the Case
The assessee, an individual, was engaged in the business of manpower consultancy & recruitment. She also earned rental & interest income.
For AY 2023-24, the assessee filed her return declaring total income of ₹11,78,580. She disclosed business turnover of ₹52,01,836 & offered business income at 6% under the presumptive taxation scheme u/s 44AD.
The return was selected for scrutiny under CASS for the reason: “Large cash payments made for credit card purchases.”
During the assessment, the AO examined cash deposits appearing in the bank accounts & cash payments made toward credit-card bills.
Two separate additions aggregating to ₹20,39,312 were ultimately made.
Addition of ₹10.24 Lakh u/s 69A
The AO noticed aggregate cash deposits of ₹10,24,000.
The assessee furnished the following explanation:
₹3,11,000 represented cash receipts arising from her manpower consultancy business; and
₹7,13,000 was deposited in a joint overdraft account held with her husband, who was the primary account holder. This amount was allegedly deposited by her husband & did not belong to the assessee.
