TMI Blog2022 (3) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... matter, we set aside the orders of the authorities below. The assessing officer is directed to accept the income returned at ₹ 14, 66,462/-. Appeal filed by the assessee is allowed. - I.T.A No.782/Mum/2021 - - - Dated:- 14-3-2022 - Shri Sandeep Singh Karhail (Judicial Member) And Shri Gagan Goyal (Accountant Member) For the Assessee : Shri Hitesh Dharmashi For the Department : Shri Chandra Vijay,CIT DR ORDER PER: GAGAN GOYAL (AM): This appeal has been filed by the assessee against the order dated 31/03/2021 passed by the National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2017-18. 2. The sole grievance of the assessee in this appeal is that the authorities below erred in not following computation of income under section 44AD of the Income-tax Act, 1961. 3. The facts of the case are that the assessee, an individual, is doing business/profession as consultant. Assessee is not professionally qualified and simply is a commerce graduate. Return of income for the assessment year under consideration was filed on 22/06/2017 declaring total income at ₹ 13,11,310/-. The return was processed under section 143(1) at CPC, Bangal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch adjustments either in writing or in electronic mode: Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made:] 84 [Provided also that no adjustment shall be made under sub-clause (vi) in relation to a return furnished for the assessment year commencing on or after the 1st day of April, 2018;] (b) the tax 85 [, interest and fee], if any, shall be computed on the basis of the total income computed under clause (a); (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax 85[, interest and fee], if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax 86[, interest or fee]; (d) an intimation shall be prepared or generated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption or to disallow the relief. As a consequence, if the Assessing Officer levies additional tax based on the presumption that there is no evidence, such levy of additional tax will not be legally sustainable. 9. In this context, in the decision of the Hon ble Delhi High Court in S.R.F. Charitable Trust v. Union of India [1992] 193 ITR 95, it has been held that there is no power given to the ITO to disallow the claim for the reason that there is no proof in support of the claim made by the assessee. The Hon ble High Court's view is that as per clause (iii) of the proviso to section 143(1)(a), the ITO can make an adjustment to the income or loss declared in the return, if on the basis of the information available in such return, accounts or documents, the deduction, allowance or relief claim is prima facie inadmissible. The logical fall-out of this judgment is that in cases where the Annexure to the return is not at all insisted upon, it can never form part of the record of the ITO and so it cannot be considered at all by the Assessing Officer. It follows that no disallowance can be made on the simple ground that the assessee has not adduced any evidence for making such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compute his total income in accordance with the provisions of this Act. From the reading of the aforesaid provision, it could be safely concluded that the expression Technical Consultancy would only mean rendering of technical services by assessee. In our considered opinion, the expression Consultancy‟ could not be brought within the ambit of consultancy‟. 12. The assessee has filed return her return of income u/s. 44AD of the act, considering her receipts from business and not of profession. For sake of clarity section 44AD is reproduced herein below: Special provision for computing profits and gains of business on presumptive basis. 85 44AD. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head Profits and gains of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) a person carrying on any agency business.] Explanation.-For the purposes of this section,- (a) eligible assessee means,- (i) an individual, Hindu undivided family or a partnership firm, who is a resident, but not a 92 limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and (ii) who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading C. - Deductions in respect of certain incomes in the relevant assessment year; (b) eligible business means,- (i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and (ii) whose total turnover or gross receipts in the previous year does not exceed an amount of 93 [two crore rupees].] 13. The assessee has declared an income of Rs ₹ 14, 66,462/- out of total receipt of ₹ 32, 40,000/- which works out to around 45% of the gross receipts which is fair enough. In this view of the matter, we set aside the orders of the authorities below. The assessing officer is direc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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