Hanif Osman Ravda Vs ITO (ITAT Rajkot)
Presumptive Income u/s 44AD Covers Cash Deposits – No Further 69A Addition; Entire ₹13.71 Lakh Deleted in Assessee’s Favour
Assessee, a small trader in cutlery, did not file return u/s 139(1) as his income was below taxable limit. AO obtained information of cash deposits of ₹13,71,365 in Union Bank account & issued notice u/s 148 on 27.03.2019. Assessee replied but did not file return in time. AO completed assessment u/s 143(3) r.w.s. 147, treating the entire cash deposits as unexplained money u/s 69A, ignoring Assessee’s business explanation.
Before CIT(A)/NFAC, Assessee explained that he was doing small cutlery trading, had given names, addresses & contact details of customers, & that deposits represented business turnover. He also filed return u/s 148 declaring gross receipts of ₹16,50,675 & income of ₹2,72,140 under presumptive taxation u/s 44AD, & paid tax thereon. However, CIT(A) confirmed the addition without proper appreciation.
Before ITAT, there was a delay of 68 days in filing appeal, which was condoned considering sufficient cause. Assessee argued that AO & CIT(A) failed to verify customer details, ignored that income was already taxed u/s 44AD, & made addition merely on cash deposits without adjusting cash withdrawals used in business. He submitted that once income is offered u/s 44AD, no further books are required & no separate addition for cash deposits can be made unless source is disproved.
