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TMI Blog2025 (5) TMI 1576X X X X Extracts X X X X X X X X Extracts X X X X ..... tified in confirming the addition to the extent of Rs. 36,65,248. 3. Brief facts of the case are as follows: The assessment was completed u/s. 143(3) of the Act vide order dated 16.03.2021. In the said assessment order, the Assessing Officer (hereinafter "the AO") had estimated income from agency business of Rs. 7,62,54,049 at 8% and added to the total income a sum of Rs. 61,00,323. The AO observed that the assessee had disclosed business profit u/s. 44AD of the Act at 8% of direct trading business of Rs. 1,33,87,774. It was stated by the AO that the turnover of Rs. 7,62,54,049 from agency sales was not disclosed by the assessee. Since there was no cogent explanation from the assessee, the AO applied profit percentage on agency sales of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isled the AO for which he was not successful as the Id AO rejected the same. 4.6 Section 44AF of the Act reads as under- Special provisions for computing profits and gains of retail business. 44AF. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee engaged in retail trade in any goods or merchandise, a sum equal to five per cent of the total turnover in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum as declared by the assessee in his return of income shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession": Provided that nothing contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and gets his accounts audited and furnishes a report of such audit as required under section 44AB.] [(6) Nothing contained in this section shall apply to any assessment year beginning on or after the 1st day of April, 2011.] 4.7 Considering my observations made in the above paragraph and to meet the principle of natural justice, it would fair and justified if the undisclosed trading sale of Rs. 7,62,54,049/- is computed as per provision of section 44AF of the Act taking 5% profit instead of applying section 44AD. Thus, I direct the AO to re-compute trading receipt of Rs. 7,62,54,049/- which was not disclosed by the appellant in his return, u/s 44AF of the Act. The ground of appeal is thus, partly allowed." 5. Aggrieved by the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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