Case Law Details
DCIT Vs Kalpesh Kantilal Gada (ITAT Mumbai)
In the case of DCIT Vs Kalpesh Kantilal Gada, ITAT Mumbai delivered a significant verdict regarding the treatment of turnover declared under section 44 AD of the Income Tax Act. The Revenue had contested the legitimacy of turnover disclosed by the assessee, resulting in an addition under section 68. However, the ITAT’s decision sheds light on the interpretation and application of these provisions.
The appeal stemmed from the Revenue’s dissatisfaction with the Commissioner of Income Tax, Appeals’ decision favoring the assessee, Kalpesh Kantilal Gada, for the assessment year 2017-18. Gada, engaged in various business ventures including trading in Grey clothes, disclosed income under section 44AD of the Act, with a declared profit against gross receipts. Despite furnishing details regarding cash deposits, the Assessing Officer treated the trading activity as non-genuine, resulting in an addition under section 68.
However, the ITAT’s analysis considered the provisions of section 68, emphasizing the requirement for the sum to be credited in the assessee’s books of accounts, which, in this case, were not maintained due to the presumptive income declaration under section 44AD. The Tribunal highlighted the definition of ‘books of account’ under section 2(12A) of the Act, excluding bank passbooks. Citing judicial precedents, including the decision in Narendra Kumar Gupta vs DCIT and Dinesh Kumar Verma v/s ITO, the ITAT established
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