REENA BHATIA, LUDHIANA,PUNJAB vs. JAO THE INCOME TAX OFFICER WARD 7(1) LDH, PUNJAB

The assessee derived income from trading of shares and derivatives. She also carried out manufacturing of engineering goods under proprietorship concern by the name M/s Shubham Engineers. The assessee prepared combined financial statements. On sale of shares / derivatives, the assessee arrived at business profit of Rs.4.01 Lacs whereas the assessee also credited business income u/s 44AD @6% on turnover of Rs.34.75 Lacs and declared income of Rs.2.08 Lacs which was credited in its Profit & Loss Account. The return of income as filed by the assessee for Rs.4.58 Lacs was subjected to scrutiny.

In support of business turnover, the assessee furnished copies of VAT / GST returns. Since sale in July was shown as Nil, Ld. AO doubted the genuineness of the business. In the result, the sale figures for April to June, 2017 for Rs.17.15 Lacs were held to be unexplained money u/s 69A whereas the sales for subsequent months for Rs.17.59 Lacs were held to be income from other sources. Finally, the assessment was completed at Rs.39.34 Lacs. The Ld. CIT(A) confirmed the assessment on the ground that the assessee did not furnish party-wise sales breakup and vendors details. Aggrieved, the assessee is in further appeal before us.

From the facts, it emerges that the assessee has declared presumptive profit of 6% on bank credits which would show that the sales turnover have happened through banking channels. The sales turnover is evidenced by VAT / GST returns. In terms of provisions of Sec.44AD, the assessee is not required to maintain regular books of accounts and accordingly, not required to furnish these details to lower authorities. Similar business income is reflected by the assessee in AY 2017-18 which have been accepted by Ld. AO in scrutiny assessment u/s 143(3) vide order dated 20-12-2019. The conclusion that the business is not genuine is on mere presumptions only without there being any supporting evidence on record. Therefore, impugned addition of Rs.34.75 Lacs is unsustainable on facts. The presumptive income as declared by the assessee u/s 44AD is to be accepted. We order so.

The appeal stand allowed. Order pronounced on 04-08-2025. Sd/- Sd/- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 04-08-2025. आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR