THE ITO, WARD-9(4),, AHMEDABAD vs. SHRI AMRISHBHAI H.PATEL,, AHMEDABAD

This appeal filed by the Revenue is directed against the order of the Ld. CIT(A)-10, Ahmedabad dated 27.10.2015 pertaining to A.Y. 2011-12 and following grounds have been taken:

The assessee is an individual and is engaged in the business of transportation and catering. He filed his return of income for assessment year 2011-12 on 26.11.2011 declaring total income of Rs. 2,94,740/- which comprises of Income from Business under sections 44AD and 44AE of Income Tax Act. and declared income under 44AD to the tune of Rs. 12,960/- and declared transport income under section 44AD of Rs.65,776/- and income from heavy vehicle under section 44AE to the tune of Rs. 60,000/- so it comes to Rs.1,38,736/-.

Apart from salary income amounting to Rs. 1,56,000/- to total income amounting to Rs.2,94,736/-. Since the assessee has opted for presumptive tax under section 44AE of the Income Tax Act, therefore, he was not maintaining books of account and Assessing Officer nowhere mentioned that assessee was not maintaining books of account. The assessee was under mental pressure due to some domestic problem, therefore, he could not appear before the ld. A.O. Therefore, in the absence of assessee, ld. A.O. made an addition of unexplained cash deposit in undisclosed bank account to the tune of Rs. 68,14,880/-.

Thereafter, ld. CIT(A) sought remand report from the Assessing Officer wherein before the ld. A.O., assessee reiterated that he is not maintaining regular books of account and declared income under section 44AD and under section 44AE and same income was earned from the so called non declared bank account of the assessee. 6. Apart from that, assessee also filed an affidavit stating that cash deposits are out of cash withdrawal from the bank which was not declared by the assessee as he declared his income under section 44AD and 44AE and ld. CIT(A) granted relief to the assessee.

Now revenue has come before us by way of second appeal. Assessee is a small businessman and also having salary income and declared his income under section 44AD and 44AE.

In Section 44AD a special provision for computing Profit and gains of business on presumptive basis are described: (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 Substituted by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2011. Prior to its substitution, section 44AD, as inserted by the Finance Act, 1994, w.e.f. 1-4-1994 and later on amended by the Finance Act, 1997, w.r.e.f. l-4-1994/w.e.f. 1-4-1997, Income-tax (Second Amendment) Act, 1998, w.r.e.f. 1-4-1997 and Finance Act, 1999, w.e.f. 1-4-1998, read as under: '44AD. Special provision for comparing profits and gains of business of civil construction, etc.—(1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee engaged in the business of civil construction or supply of labour for civil construction, a sum equal to eight per cent of the gross receipts paid or payable to the assessee in the previous

And in Section 44AE a special provision have been made for computing profit and gains of business of plying, hiring or leasing goods carriages wherein it is mentioned that: (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee, who owns not more than ten goods carriages 25[at any time during the previous year] and who is engaged in the business of plying, hiring or leasing such goods carriages, the income of such business chargeable to tax under the head "Profits and gains of business or profession" shall be deemed26 to be the aggregate of the profits and gains, from all the goods carriages owned by him in the previous year, computed in accordance with the provisions of sub-section (2). 27[(2) For the purpose of sub-section (1), the profits and gains from each goods carriage shall be an amount equal to seven thousand five hundred rupees for every month or part of a month during which the goods carriage is owned by the assessee in the previous year or an amount claimed to have been actually earned from the vehicle, whichever is higher.]

And before the ld. CIT(A), assessee has given detailed working of his income.

In support of its contention, assessee cited a judgment of Hon’ble Gujarat High Court in the matter of CIT Vs. Shailesh Rasiklal Mehta wherein it is held: “There being no dispute about the amount of Rs.30 lakhs having been withdrawn in cash from the bank account of the assessee by M who stated that the same was deposited with the Tribunal was justified in coming to the conclusion that there was no question of treating the deposit in question as unexplained and no addition was warranted.”

When assessee declared his income u/s. 44AD and u/s. 44AE he is not supposed to maintain books of account and as per language of the section 8% of the total turnover to be charged.

As we can see, that assessee has explained the deposit and withdrawal were for the business purpose only. Therefore, in our considered opinion, ld. CIT(A) has passed reasoned order and in these circumstances, we allow the appeal of the assessee.

In the result, appeal filed by the Revenue is dismissed.