9911796707
TMI Blog2005 (11) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee may not be covered by provisions of section 44AF of the Income-tax Act not disputed by the ld. Assessing Officer at the time of assessment of penalty proceedings. 3.The assessee may please be allowed cost of the appeal. 4.The assessee also requests to be allowed to amend or raise any ground of appeal before or at the time of hearing." 2. The assessee is a retailer dealing in kiryana goods in village Dhanauri, District Jind, declared an income of Rs. 65,279 in its return filed on 31-3-2002 comprising business income of Rs. 1,35,240 and loss on account of house loan interest of Rs. 69,961 on 20-5-2004. The assessee did not maintain accounts. The assessee was issued show-cause notice under section 271A to which the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. I have considered the rival submissions. 5. The assessee is deriving income from kiryana business, declared an income of Rs. 65,280 on 31-3-2002. The assessee showed income of Rs. 1,35,240 from kiryana business and claimed deduction under section 24(1)( vi ) amounting to Rs. 69,961 as interest paid. The Assessing Officer held that the assessee violated the provisions of section 44AA of the Act in not maintaining the books of account and even the income from kiryana business was more than Rs. 1.20 lakhs, and thus, initiated penalty proceedings. The major plea of the assessee is that the provisions of section 44AA did not apply as the assessee is engaged in retail trade. During argument, the ld. counsel for the assessee contended tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e total turnover or the rate of profit in its statement of income, the case of the assessee cannot be covered within the provisions of section 44AF of the Act. Section 44AF of the Act speaks about special provisions for computation of profits and gains of retail business which is reproduced herewith : "44AF. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee engaged in retail trade in any goods or merchandise, a sum equal to five per cent of the total turnover in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum as declared by the assessee in his return of income shall be deemed to be the profits and gains of such business chargea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB. If the facts of the case and the provision of section 44AF are put in a juxta position and analysed, the said section speaks about total turnover in the previous year on account of such business. Undisputedly, the assessee has not declared the figure of total turnover in its statement of account. The case of the assessee may not be covered within he provisions of section 44AF of the Act. Since the income of the assessee is more than Rs. 1,20,000 as is evident from the statement of facts, the case of the assessee is covered by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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