Case Law Details
Shri Kokkarne Prabhakara Vs. ITO (ITAT Bangalore)
Asking the assessee to prove to the satisfaction of the Assessing Officer, the expenditure to the extent of 92% of gross receipts, would also defeat the purpose of presumptive taxation as provided under section 44AD of the Act or other such provision. Since the scheme of presumptive taxation has been formed in order to avoid the long drawn process of assessment in cases of small traders or in cases of those businesses where the incomes are almost of static quantum of all the businesses, the Assessing Officer could have made the addition under section 69A of the Act, once he had carved out the case out of the glitches of the provisions of section 44AD of the Act. No such exercise has been done by the Assessing Officer in this case.
I am of the opinion that once the assessment of the assessee was completed u/s. 44AD, there cannot be any application of sec. 68/69A of the I.T. Act. Being so, I direct the AO to delete the addition made by the AO and confirmed by the CIT(A) at Rs.3 lakhs.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against the order of the CIT(A) dated 14/03/2019.
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