Case Law Details
Sarabjeet Singh Vs ITO (ITAT Amritsar)
The brief fact of the case that the assessee is a trader &filed his return u/s 139(1) by taking the benefit of presumptive scheme u/s 44AD of the Act. During the F.Y. 2010-11 related A.Y. 2011-12 the turnover was 15,50,000/- & declared total income of Rs.1,40,880/-. The notice u/s 148 was issued for depositing the cash in assessee’s bank account amount of Rs.12,66,500/-. Accordingly, the notice u/s 133(6) was issued for verification of transaction. The assessee’s claim was that the amount was deposited in the bank account, out of his gross receipt from the business. After depositing the cash, the assessee issued cheque to the party for purchasing of material. The ld. AO without considering the assessee’s submission had adjusted the withdrawn from bank with deposit of cash, had determined the cash deposit in bank account amount to Rs. 12,44,880/-. The ld. AO had wrongly determined total income of Rs.25,12,800/- in the assessment order passed u/s 143(3)/147. The assessee filed a rectification petition u/s 154 and the demand was rectified and the addition was made Rs.12,44,880/- with total income of the assessee. The assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) upheld the order of the ld.AO.
Assessee had availed the presumptive scheme u/s 44AD during filing his return. The assessee has no liability to maintaining the books of account as per the provision of the Act. In the case of Hon’ble High Court of Allahabad in the case of Commissioner of Income-tax-I, Kanpur v. Nitin Soni [2012] 21 taxmann.com 447 (All.) holding that ;
“The very purpose and idea of enactment of provision like section 44AE is to provide hassle free proceedings. Such provisions are made just to complete the assessment without further probing provided the conditions laid down in such enactments are fulfilled. The presumptive income, which may be less or more, taxable. Such an assessee is not required to maintain any account books. This being so, even if, its actual income in a given case, is more than income calculated as per sub section (2) of section 44AE, cannot be taxed.”
Assessee had properly submitted through his counsel that the said amount was paid from his business receipt. The benefit should be allowed the assessee for availing section 44AD for non-maintaining the books of account.
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