Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 1758 - ITAT DELHIRevision u/s 263 - as per CIT(A) AO has allowed benefit of section 44AD/AF erroneously without considering whether conditions thereto are fulfilled, and also not by applying provisions of section 69A of the Act - Held that:- AO, after considering the totality of the facts and circumstances of the case, proceeded to estimate the business income of the assessee @8% of gross receipts and made an addition of ₹ 6,11,230/- which was accepted by the assessee without any further litigation. However, we cannot ignore that the AO in the operative part of the assessment order has referred to section 44AF of the Act while estimating the business income @8% of gross receipts but as per said provision, the business income has to be assessed @5% of the total turnover during the previous year on account of such business provided total turnover of the assessee does not exceed an amount of ₹ 40 lakh in the relevant previous year. AO has not taken total turnover of assessee in the trading of cloth and the AO has adopted higher figure taking total amount of gross receipts during the relevant financial period. The CIT has not brought out any fact to establish that the assessee had not undertaken any inquiry in regard to the alleged cash deposited to his bank account and the CIT has not brought out any fact to this effect that in absence of amount and other records, which were lost by the assessee, the AO was not correct in making estimation of business income @8% of gross receipts and the conclusion drawn by the AO was not in accordance with the provisions of the Act and thus, the same was unsustainable in law. Per contra, as we have already noted that the AO inquired from the assessee about the amount of cash deposited during the relevant financial period and after considering the reply of the assessee wherein the assessee stated that he had lost his books of accounts and other records, then the AO had no alternative but to estimate the business income of the assessee by taking a reasonable and appropriate recourse. Thereafter, the AO proceeded to estimate the business income of the assessee @8% of gross receipts by merely referring to section 44AF of the Act. We cannot ignore this fact that in the letter dated 20.12.2013, the assessee pressing into service his revised computation of income pleaded that the surrendered amount may be considered as business income being 5% of gross receipts but the AO adopted higher percentage of 8% for estimation of business income which is very favourable to the revenue. It is also relevant to point out that the AO has taken 5% on gross turnover for AY 2010-11 viz. preceding assessment year to the present assessment year in the assessment order passed u/s 143(3) of the Act. On the basis of foregoing discussion, we reach to a logical conclusion that the view and approach taken by the AO in framing original assessment order passed u/s 143(3) was quite justified, reasonable and in accordance with the provisions of the Act. - Decided in favour of assessee
|