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2020 (4) TMI 818 - AT - Income TaxUnexplained money u/s 69A - assessee had not maintained books of account that is why he opted for 8 per cent income as per section 44AD - CIT-A rejected the transactions declared u/s 44AD as turnover - HELD THAT:- If 8 per cent of gross receipts are 'deemed' income of the assessee, the remaining 92 per cent are also 'deemed' expenditure of the assessee. Meaning thereby that actual expenditure may not be 92 per cent of gross receipts, only for the purposes of taxation, it is considered to be so. Expenditure may be less than 92 per cent or it may also be more than 92 per cent of gross receipts. On the reading of the substantive part of the provision, it is quite clear that an assessee availing the benefit of such presumptive taxation can claim to have earned income at the rate of 8 per cent or above of the gross receipts. In that case, the provisions of sub-section (5) of the said section will be applicable to it. From the combined reading of sub-section (1) and sub-section (5), it is apparent that the obligation to maintain the books of account and get then audited is only on the assessee who opts to claim the income being less than 8 per cent of the gross receipts. Argument of the revenue that the turnover of the assessee has been doubted by the Assessing Officer is totally ill-found, in view of the overwhelming evidences proving contra. Further, it is a fact on record that the assessee had not maintained books of account that is why he opted for 8 per cent income as per section 44AD of the Act. The section also does not put obligation on the assessee to maintain books of account, more so, in view of the fact that his income has been assessed as per section 44AD of the Act, he cannot be punished for not maintaining the same. The argument of the revenue that the assessee was in fact, not in the eligible business untenable. Confirmations of the parties, having proved their sources and creditworthiness, the entries in the bank statement, the payments made for purchase of material and keeping in view, the place of execution of the work, we hold that the addition made by the Assessing Officer is liable to be deleted. - Decided in favour of assessee.
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