Vijay Bahadur Vs ITO (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT), Chandigarh, partly allowed the assessee’s appeal for Assessment Year 2018–19 against the order of the Commissioner of Income Tax (Appeals), NFAC, arising from an assessment framed under Sections 147 read with 144B of the Income-tax Act. The assessee had not filed a return of income. The case was reopened after it was found that the assessee had traded in bitcoins amounting to ₹25.07 lakh. The assessee stated that he was engaged in a bitcoin investment and trading referral network, arranging prospective investors and earning referral service incentives in the form of bitcoins, which were subsequently encashed and credited to his bank account.
The assessee offered presumptive income under Section 44AD on receipts of ₹30.35 lakh, which was rejected by the Assessing Officer, who brought the entire receipts to tax. The CIT(A) confirmed the assessment due to the absence of representation by the assessee. The Tribunal observed that the assessee had provided business support services and earned referral commission income in the nature of service income. As the assessee had not maintained relevant records or regular books of account, the Tribunal held that the income could be determined on a presumptive basis under Section 44ADA at 50% of the gross receipts. The Assessing Officer was directed to recompute the income accordingly. The Tribunal found no infirmity in the reassessment proceedings initiated by the Assessing Officer. The appeal was partly allowed.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
1. Aforesaid appeal by assessee for Assessment Year (AY) 201819 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 24.11.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 r.w.s. 144B of the Act on 26.12.2023. The Ld. AR argued on merits only whereas Ld. Sr. DR pleaded for dismissal of the appeal. Having heard rival submissions, the appeal is disposed-off as under.
2. The assessee did not file return of income. It transpired that the assessee traded in bitcoins for Rs.25.07 Lacs. Accordingly, the case was reopened. The assessee stated that it was engaged in referral network of bitcoin investment / trading and arranged prospective investors for bitcoin investment. The assessee received referral service incentives in the form of bitcoins which were encashed and credited in his bank account. However, the assessee could not substantiate the same. The assessee offered presumptive income u/s 44AD on receipt of Rs.30.35 Lacs which stood rejected by Ld. AO. Finally, the whole of the receipts was brought to tax. The Ld. CIT(A) confirmed the assessment for want of any representation from the assessee. Aggrieved, the assessee is in further appeal before Tribunal.
3. From the facts, it emerges that the assessee has provided business support services and earned referral commission income in the shape of bitcoins which were later on encashed and credited in his bank account. On these facts, the assessee’s income could be determined on presumptive basis u/s 44ADA @50% of gross receipts since the assessee has not maintained relevant records as well as regular books of accounts. The income so earned by the assessee is in the nature of service income. Accordingly, I direct Ld. AO to estimate the assessee’s income @50% of gross receipts and recompute the income of the assessee. No other ground has been urged in the appeal. No infirmity could be shown in reassessment proceedings as initiated by Ld. AO.
4. The appeal stands partly allowed.
Order pronounced on 06th July, 2026
