Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (3) TMI 955 - AT - Income TaxUnexplained income - Held that:- Limit of gross receipts/turnover has been fixed under the provisions of section 44AD which in this case for assessment year 2006-07 was ₹ 40,00,000/-. Hence the income to be assessed on presumptive basis must be in consonance with the gross receipts of total turnover which according to the provisions of the section 44AD is taken at 8%. The conclusion is that though the assessee may claim that it has earned the income less than the 8% of the total turnover yet, if it does not maintain any books of account, still it is bound to offer the income at the rate of 8% of the total turnover/gross receipts. However, the assessee is precluded from claiming that it has in fact earned the income higher than 8% and it has been so declared by it also, but it is absolved any liability of paying the tax on the additional income but only on the income arrived at the rate of 8% of the total turnover. Though there is no necessity to maintain accounts in case of furnishing return under section 44AD yet, if the assessee has maintained any accounts and has furnished the same with the return of income, like the capital account of the partners in the case in hand, the AO can examine said accounts and if he finds that there is an introduction of unexplained cash in the capital accounts of the assessee, he would be justified to ask the assessee to explain the source of such credits and in the absence of any satisfactory explanation, the AO will be justified in adding such sum into the income of the assessee. - AO found unexplained cash introduced in the capital account of the partners. The said capital accounts were also filed with the return of income furnished under section 44AD. The ld. CIT(A) from the explanation offered in the case of Shri Ishwar Shivgan Patel was satisfied regarding the source of cash introduced into the capital account of the partners of the firm and hence he deleted the additions. However, the assessee firm since have failed to explain regarding the introduction of cash in the account of Shri Shivgan Jetha Patel, hence he rightly confirmed the addition on account of unexplained introduction of cash in that account. - Decided against assessee.
|