SAMIRKUMAR JAYANTILAL SHAH,AHMEDABAD vs. THE PR. CIT.-7, AHMEDABAD

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ITA 1275/AHD/2016Status: DisposedITAT Ahmedabad28 February 2019AY 2011-123 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal accepted the assessee's request to apply Section 44AD and determined the business income at 8% of the turnover. The addition made by the AO under Section 69 was effectively set aside by this determination.

What were the facts?

The assessee's income was assessed after the AO added Rs. 25,72,920/- as unexplained deposits under Section 69. The assessee, a small businessman, requested that Section 44AD be applied to determine business income at 8% of turnover.

What were the issues?

Whether the addition of unexplained cash deposits under Section 69 was justified, and if Section 44AD could be applied to determine the business income.

Which sections of the Income-tax Act were involved?

Section 69,Section 44AD,Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD

For Appellant: Shri P. D. Shah, AR

PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. At the time of hearing, assessee submitted a letter for withdrawal of ITA No. 1275/Ahd/2016 and he stated that the reason that assessee is a small

ITA No. 1275/Ahd/2016 & 2 ITA No. 2046/Ahd/2017 . A.Y. 2011-12 businessman of cloth and want to avoid litigation. Therefore, permission is granted to the assessee for withdrawal of appeal. Therefore, same is dismissed as withdrawn.

2.

Now we come to appeal in ITA No. 2046/Ahd/2017 where assessee was challenged the order of the ld. CIT(A) that he has erred in law and facts by confirming the addition of Rs. 25,72,920/- u/s. 69 of the amount of deposited with the Bank.

3.

The facts of the case in brief are that the assessee filed his return of income on 17.10.2011 declaring total income of Rs.90,000/- as income from salary. The assessment was completed u/s. 143(3) of the I.T. Act at a total income of Rs.1,16,355/- on 24.3.2014. Subsequently, the Pr. CIT-7, Ahmedabad passed an order u/s. 263 of the Act on 21.3.2016 with a direction to the AO to make a fresh assessment in view of the fact that at the time of assessment proceedings, cash deposits of Rs.25,72,920/- in the bank account of the appellant had not been verified and examined. Thereafter, as per the directions of the Pr. CIT, the AO issued the relevant notices to the assessee as per law and after a detailed examination of the facts of the case and submissions made by the assessee during the assessment proceedings, he added the amount of Rs.25,72,920/- u/s 69 of the Act to the total income of the assessee.

4.

Against the order of the A.O., assessee preferred first statutory appeal before the ld. CIT(A) who dismissed the appeal of the assessee.

5.

In this case, assessee’s total turnover is Rs. 32,83,822/- and profit and loss account and the balance sheet has been submitted to the ld. A.O. wherein said

ITA No. 1275/Ahd/2016 & 3 ITA No. 2046/Ahd/2017 . A.Y. 2011-12 loss of Rs. 12,167/- has been shown and the ld. A.O. while passing the order u/s. 143(3) has computed business income of Rs. 26,355/-.

6.

At the outset, ld. A.R. on behalf of the assessee stated that assessee is a small business man and requested that section 44AD may be applied in the case of assessee and business income @ 8% on the turnover of Rs. 32,83,822/- i.e. Rs. 2,62,706/- may be determined. In our considered opinion, the request of the assessee is genuine and we accede to the same and hold that income of the assessee to be determined @ 8% on the turnover of Rs. 32,83,822/-.

7.

In the result, both the appeals filed by the Assessee are allowed.

Order pronounced in Open Court on 28 - 02- 2019

Sd/- Sd/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad: Dated 28 /02/2019 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad

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