GHANSHYAM K KEVADIYA HUF,SURAT vs. ITO-1(3)(6), SURAT

Facts

The assessee's assessment for AY 2010-11 was reopened under sections 147/148, leading to additions of Rs. 23,31,000/- (cash deposit) and Rs. 3,16,608/- (8% of Rs. 39,57,606/- as business income under section 44AD) by the AO, which were confirmed by the CIT(A). A penalty under section 271(1)(c) was also levied. The assessee filed appeals to the Tribunal with a delay of 256 days, attributing it to non-communication of the CIT(A)'s order.

Held

The Tribunal condoned the delay in filing both appeals, finding it not intentional. On quantum, the Tribunal directed the AO to consider 12% of the cash deposits of Rs. 23,31,000/- as business income, applying the presumptive taxation principle under section 44AD, given the assessee's retail trading business. The penalty levied under section 271(1)(c) was entirely deleted, as it is not leviable on income estimated under presumptive assessment.

Key Issues

Condonation of delay in filing appeals; validity of additions made under sections 144/147/148, particularly cash deposits and other credits treated as business income under section 44AD; and leviability of penalty under section 271(1)(c) on estimated income.