TMI Blog2023 (1) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... resumptive basis - income declared u/s. 44AD of the Act at a percentage of turnover which is higher than the percentage prescribed u/s. 44AD - HELD THAT:- Upon considering as per the said Explanation (2) to section 44AD, the assessee firm will be considered as an eligible business to come under the purview of section 44AD. The intention of the legislature in case of computing profit and gains of business on presumptive basis is to enhance the tax payers to declare income at the minimum rate prescribed u/s.44AD and also allows the assessee to offer income higher than the said prescribed rate, in case of business, whose total turnover or gross receipts in the previous year, does not exceed the amount prescribed under law. The lower authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has not collected it from the customers through bills, invoices, etc. and to decide this issue on merits. - ITA Nos. 1887/Mum/2022 And ITA No. 1888/Mum/2022 - - - Dated:- 1-12-2022 - Shri M. Balaganesh, AM And Ms. Kavitha Rajagopal, JM For the Appellant : None For the Respondent : Shri Manoj Kumar Singh ORDER PER KAVITHA RAJAGOPAL, J. M.: The captioned appeals have been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals) ( ld.CIT(A) for short), passed u/s.250 of the Income Tax Act, 1961 ( the Act'), pertaining to the Assessment Year ( A.Y. for short) 2017-18. 2. As the facts are identical in both these appeals, we hereby pass a consolidated order by taking ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss. Pursuant to the survey action u/s.133A of the Act conducted in the business premises of the assessee dated 22.01.2018, the partner of the assessee firm Shri Chandrakant Ramanna Shetty made a voluntary declaration of Rs.26,27,872/- on the total sales of Rs.1,30,15,820/-. The assessee filed its return of income dated 30.03.2018, declaring total income of Rs.19,52,370/-. Subsequent to that, the assessment order dated 29.11.2019 was passed u/s. 143(3) of the Act determining the total income of Rs.26,27,872/- by making the addition of Rs.6,75,502/-. 6. The assessee preferred an appeal as against the assessment order before the ld. CIT(A) who confirmed the said addition made by the A.O. 7. Further aggrieved, the assessee is in appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which held that the statement recorded u/s. 133A has no evidentiary value and that the same cannot be the only basis for making the addition. The assessee has also specified that the difference in the amount declared by the partner of the assessee firm and that of return income was due to the expenses of the VAT payments which was from the coffers of the assessee and has not been collected separately in the bill, cash memo or invoice issued to the customers. The assessee contends that the said expenditure was incurred wholly and exclusively for carrying out the business of the assessee and was inadvertently not taken into account in computing the total expenses of Rs.1,03,87,948/- during the survey operation. The ld. CIT(A) on the other han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act at a percentage of turnover which is higher than the percentage prescribed u/s. 44AD of the Act. It is observed that the contention of the assessee is that it had declared higher profit than the percentage specified u/s. 44AD of the Act which is 8%, whereas the assessee has declared an income @ 14.99% of the turnover made during the impugned year. The ld. CIT(A) has held that the A.O. has got extensive power to assess the income beyond section 44AD if the A.O. can substantiate the same by sufficient documentary evidence. The ld. CIT(A) further held that the A.O. can tax the assessee at a higher rate than what is specified in section 44AD or than that declared by the assessee. It is pertinent to examine the provision of section 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (2) to section 44AD, the assessee firm will be considered as an eligible business to come under the purview of section 44AD. The intention of the legislature in case of computing profit and gains of business on presumptive basis is to enhance the tax payers to declare income at the minimum rate prescribed u/s.44AD and also allows the assessee to offer income higher than the said prescribed rate, in case of business, whose total turnover or gross receipts in the previous year, does not exceed the amount prescribed under law. The lower authorities have not denied the fact that the assessee is an eligible assessee , carrying out eligible business under the provisions of section 44AD of the Act. On this observation, we hold that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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