TMI Blog2022 (12) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... in law and because of this error the AO did not examine the cash deposit making the assessment order pre judicial to the interest of the revenue. On finding these errors the CIT rightly assumed the jurisdiction cast upon him by the provisions of section 263, we do not find any error or infirmity in the findings of the Pr. CIT. The appeal of the assessee is accordingly dismissed. - ITA No.1107/Del/2021 - - - Dated:- 23-11-2022 - SH. N.K. BILLAIYA, ACCOUNTANT MEMBER AND SH. KUL BHARAT, JUDICIAL MEMBER Appellant Sh. L. M. Aggarwal, CA And Sh. Deepanshu Aggarwal, CA Respondent Sh. M. Baranwal, CIT DR ORDER PER N.K. BILLAIYA, AM: This appeal by the assessee is preferred against the order of the Pr. CIT, Ghaz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee doing commission agent business for the principal in Kirana Mandi, Ghaziabad and purchase goods from Ghaziabad Kirana Mandi for nearby Distt. Retail shopkeepers and send the goods by transport to the customer shopkeepers who deposit the petty cash payment of the goods in cash by depositing the same in bank account of the assessee in Bank of Baroda. The AO has not appreciated that the provisions of section 44AD (6) (ii) of the I. T. Act, 1961 have categorically debarred persons earning income in the nature of commission or brokerage from opting for the scheme of section 44AD of the IT Act, 1961. The AO was, therefore, duty bound to confront you regarding the above noted legal situation and he should have, accordingly insisted on produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... himself conceded that he is a commission agent and since sub-section-6, clause (ii) of section 44AD clearly excludes persons earning income in the nature of commission from the applicability of section 44AD, the order passed in the assessee's case by the ITO, Ward-2(1), Ghaziabad is erroneous and prejudicial to the interest of the Revenue. The judgements of Hon'ble Courts relied upon by the assessee are not applicable to the facts of his case e.g., the assessee has placed reliance on the judgement of the Hon ble Supreme Court in the case of M/s. Malabar Industrial Company Ltd,, vs. CIT (2000) 109 Taxman 66. However, in that case the Hon'ble Court had observed that when the Assessing Officer had adopted one of the courses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e returned profit @ 8% u/s. 44 AD of the Act. 9. This action of the assessee was accepted by the AO without realising that provisions of section 44AD of the Act do not apply to a commission agent thereby making the assessment order erroneous in law and because of this error the AO did not examine the cash deposit of Rs.5364835/- making the assessment order pre judicial to the interest of the revenue. 10. On finding these errors the Pr. CIT rightly assumed the jurisdiction cast upon him by the provisions of section 263 of the Act, therefore, we do not find any error or infirmity in the findings of the Pr. CIT. The appeal of the assessee is accordingly dismissed. Order pronounced in the open court on 23.11.2022 - - TaxTMI - TMITa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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