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TMI Blog2025 (5) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... c) On the facts and circumstances of the case in Law, Ld. CIT (A) erred in confirming stand of A.O. for deduction of Rs, 3,54,288/- on account of GP difference on account of 44AD business with alleged supplier. d) On the facts and circumstances of the case in Law, Ld. CIT (A) erred in confirming stand of A.O. for invoking section 68 of the Act which is not applicable in facts applicable in assessee's ease. e) On the facts and circumstances of the ease in Law, Ld. CIT (A) erred in confirming addition of Rs. 53,09,550/- on account of alleged purchases. f) The appellant keep its right reserve to add/modify/delete any grounds of appeal during the appellant proceedings. 2. The main issue agitated by the appellant is that when the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as Rs. 8,61,450/- (as admitted in original return of income). Five opportunities were provided to the appellant to submit information including appearance through video conference to the Ld. AR of the appellant, Mr. Kantilal Jain. During the proceedings before the Ld. AO, the appellant has produced all invoices, books of account, bank accounts etc. It was pleaded before the Ld. AO that the Revenue cannot make additions to the Returned Income as he was offering income under "presumptive taxation" u/s. 44AD of the Act which does not require any maintenance of books. It was further mentioned in the assessment order that, the Ld. AO wanted to examine/record a statement from M/s. Namo Diamond Co.(P) Ltd., but there is no such company in the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant, an addition of Rs. 53,09,550/- was made by the Ld. AO under section 68 of the Act while completing the assessment. 4. Aggrieved by the addition made by the Ld. AO, an appeal was filed by the appellant before Ld. CIT(A) who has confirmed the addition made by the Ld. AO by adjudicating that section 68 of the Act can be invoked even in the case of presumptive taxation opted by the appellant because the entire transaction is a sham one, and the proper investigation was done by DRI, Income Tax Department (by deputing an Inspector). The Ld. CIT(A) has also quoted several decisions for the proposition that in the facts and circumstances mentioned in the assessment order, addition under section 68 of the Act is sustainable. 5. Aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are different. c) Mahesh Subhash Shukla (ITA No. 3919/Mum/2024 : In this case, the case of appellant is that no books of account are maintained and hence where appellant opted for presumptive taxation under section 44AD, the addition cannot be made under section 68 of the Act. The Hon'ble ITAT came to the conclusion after placing reliance on SOP issued by CBDT which states that for invoking section 68 of the Act, the Department should see the appellant maintains books of account and there should be a credit entry. In this case relied upon by appellant, the appellant did not maintain books of account and hence the Hon'ble ITAT has correctly came to the conclusion whereas, in the impugned case, the appellant has maintained all bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues are decided as follows : a) In the case of Nandlal Popli ITA No. 1161/Chd/2013, it was held that even where appellant opts for presumptive taxation scheme, the addition u/s. 68 can be made. b) Neither in section 68, nor in section 44AD, there is an express prohibition that an addition relating to cash credit cannot be made where appellant opts for presumptive taxation method. c) On 21.3.2025, during the hearing proceedings before the ITAT, the Ld. AR of the appellant has pleaded that the purchase transaction is genuine and they can prove the same before the Ld. AO if an opportunity is given, as the payment for purchase of these diamonds in question was made through banking channel in subsequent year and the same was not examined b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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