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2019 (2) TMI 898 - AT - Income TaxDetermination of turnover for tax audit u/s 44AB - Computation of turnover in respect of trading of shares/derivatives - Applicability of Section 44AD for deeming provisions of net profit and Audit liability under section 44AB - addition applying profit rate of 8% of deemed income under section 44AD - Held that:- it is not in dispute that though the assessee claimed loss in share trading, but assessee did not maintain books of account and did not get the same audited, therefore, provisions of Section 44AD will apply in the case of the assessee. The A.O. in the assessment order has referred to share trading guidance note on tax audit under Section 44AB of the Income Tax Act published by ICAI, but noted that these have not been recognised by the Department, therefore, same are not binding upon the Department. The A.O, however, taken note of the same and applied to some extent for the purpose of computing the turnover of the assessee. The A.O. cannot go in both ways Either A.O. should do his own calculation based upon evidence and material on record to calculate the turnover of assessee for the purpose of making the addition or he should follow guidance note on tax audit published by the ICAI. No other basis have been shown by the A.O. for computing total turnover of the assessee. The A.O. has also not given any finding based on material and evidence on record if assessee has suffered any loss in the share trading transactions. Therefore, to the extent of computing total turnover of assessee, the matter needs re-investigation at the level of the A.O. Thus set aside the orders of the authorities below and direct the A.O. to reduce ₹ 10 lacs from the total turnover as computed in the assessment order. A.O. shall re-calculate the turnover of assessee based on evidence and material on record. The A.O. shall give reasonable and sufficient opportunity of being heard to the assessee and shall give specific finding on the submissions made by assessee before him. - Decided partly in favour of assessee for statistical purposes.
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