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2016 (4) TMI 1086 - AT - Income TaxApplicability of provisions of section 44AF - Held that:- Total turnover is shown at ₹ 11,31,029/- which is not doubted by the lower authorities at any stage and the purchases of the assessee are explained and the profits of ₹ 2,22,214/- shown by the assessee is much higher than the profit @ 5% of turnover of ₹ 11,31,029/- calculated at ₹ 56,551/-, we are of the view that assessee’s disclosed income u/s 44AF of the Act at ₹ 2,22,214/- should have been accepted by the Revenue. Further as per second proviso to section 44AF assessee is also eligible for claiming deduction on salary and interest paid to its partners and in the case of assessee interest of ₹ 1,69,358/- and salary of ₹ 50,000/- has been shown to working partners and, therefore, assessee has rightly filed its return of income at NIL. We, therefore, are of the view that assessee is covered under the provisions of section 44AF of the Act and no addition was called for disallowance of purchases at ₹ 3,42,757/- and sustaining of disallowance on expenses @ 10% of ₹ 2,42,086/-, the same are deleted. - Decided in favour of assessee
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