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Additions towards undisclosed purchases/ expense etc. goes against spirit of section 44AD
Case Law Details
- Case Name
- Shri Thomas Eapen Vs ITO (ITAT Cochin)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2015-16
- Courts
- All ITAT, ITAT Cochin
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Shri Thomas Eapen Vs ITO (ITAT Cochin)
The assessee offered income u/s. 44AD, the assessee being a small trader in medicine. There is no dispute that the assessee falls under the provision of sec. 44AD since the turnover of the assessee is less than Rs. 1 crore from eligible business. The Assessing Officer also accepted that the assessee’s case falls under the purview of section 44AD and computed the income declared by the assessee at Rs.3,37,160/-and thereafter made addition towards undisclosed profit u/s. 68 of the Act. In other words, the Assessing Officer has not at all rejected the bo...
While it is clear order, stating that, once the 44AD is availed to file return, and 8% income is declared, AO cannot add any income, irrespective of what is actual profit. So, in nutshell, there is no need to declare actual income, as no audit is done. Only important is the actual receipts should match with the receipts you are offering in the return. Law is clear, judgements are clear, then why some CA’s keep telling that actual income should be offered ?.