GURVINDER PAL SINGH GANDHI,NEW DELHI vs. ITO,WARD 54(5),NEW DELHI, CIVIC CENTRE,NEW DELHI

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ITA 680/DEL/2024Status: DisposedITAT Delhi02 January 2025AY 2017-18Bench: Sh. Satbeer Singh Godara (Judicial Member)2 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 held that as long as the assessee's book results filed under presumptive taxation under Section 44AD are not rejected, the addition for enhancing gross profit is not sustainable. This would defeat the purpose of the presumptive taxation scheme.

What were the facts?

The lower authorities added Rs. 9,89,344/- to the assessee's income by enhancing the profit on sale of gold items from 12.59% to 16.66% on cash sales deposited in the bank. This was done in proceedings under Section 143(3) of the Income Tax Act.

What were the issues?

Whether the addition for enhancing gross profit is sustainable when the assessee is offering income under the presumptive taxation scheme of Section 44AD and the books of account have not been rejected.

Which sections of the Income-tax Act were involved?

Section 44AD,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Sh. Satbeer Singh Godara

For Appellant: Ms. Monalisa Maity, Adv
Hearing: 02.01.2025Pronounced: 02.01.2025

ORDER This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/APL/S/250/2023-24/1060392580(1) dated 01.02.2024, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).

2.

Heard both the parties at length. Case file perused.

3.

A perusal of the case file reveals that both the learned lower authorities have added an amount of Rs.9,89,344/- in assessee’s hands after enhancing his profits on sale of gold items declared @ 12.59% on his business receipt of Rs.81,40,477/- to that @16.66% of the cash sales deposited in the bank amounting to RS.59,38,441/- in the relevant previous years.

Gurvinder Pal Singh Gandhi 4. I have given my thoughtful consideration the assessee’s pleadings and Revenue vehement contentions coming from learned departmental representative’s side. I am of the considered view that till that time the assessee’s book result filed under presumptive taxation u/s 44AD are not rejected in principle, the impugned addition of enhancement of it’s gross profit would not be sustainable in law as it would defeat the purpose of the said scheme itself. I accordingly accept the assessee’s instant sole substantive grievance.

5.

This assessee’s appeal is allowed in very terms. Order Pronounced in the Open Court on 02/01/2025.

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