Section 44AD of the Income Tax Act

Income-tax Act, 2025: s.58

Section 44AD of the Income-tax Act, 1961 corresponds to section 58 (Special provision for computing profits and gains of business or profession on presumptive basis in case of certain residents) of the Income-tax Act, 2025.

Read section 58 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 44AD is Nikunj Eximp Enterprises v. CIT (216 Taxmann 171), cited in 325 of the 2,222 judgments on BharatTax that turn on this section.

Leading authorities on Section 44AD

Nikunj Eximp Enterprises v. CIT
216 Taxmann 171 · 2013 · High Court
325
citing judgments

Purchases may be treated as genuine even if the purchase parties are untraceable or not available for verification, as long as there is no specific evidence from the parties themselves denying the transactions or proving them to be bogus.

Glass Lines Equipments Company Ltd. v. CIT
253 ITR 454 · 2002 · High Court
150
citing judgments

The Assessing Officer cannot selectively accept parts of a statement or seized evidence that are favourable to the revenue while rejecting other parts favourable to the assessee without proper investigation; the evidence must be considered as a whole. Additions cannot be made based on mere presumptions or surmises without further inquiry.

Venkataswami Naidu & Co. v. CIT
35 ITR 594 · 1959 · Supreme Court
133
citing judgments

A transaction is considered an adventure in the nature of trade, constituting business income, if there is a pre-determination to sell an asset at a profit. Conduct prior to purchase, as well as subsequent improvements, are relevant in determining the character of the transaction.

CIT v. Simon Carves Ltd.
105 ITR 212 · 1976 · Supreme Court
85
citing judgments
CIT v. K. S. M Guruswamy Nadar and Sons.
149 ITR 127 · 1984 · High Court
78
citing judgments

Where separate additions are made for suppressed profit and unexplained cash credits under section 68, the assessee can explain that the suppressed profit accounts for the cash credit, allowing for telescoping of additions to prevent double taxation.

(CIT v. R. Venkataswamy Naidu
29 ITR 529 · 1956 · Supreme Court
63
citing judgments

The assessee bears the onus to establish any claim for exemption, including agricultural income, by providing proper evidence and materials. The assessing officer is not primarily burdened with proving the assessee's claims.

Raja J. Rameshwar Rao v. CIT
42 ITR 179 · 1961 · Supreme Court
54
citing judgments

A transaction, even if appearing to be in the capital field or recorded as such, can constitute an 'adventure in the nature of trade,' leading to taxable income from business rather than capital gains.

CIT v. Raj Pal Bhatia
333 ITR 315 · 2011 · High Court
54
citing judgments

A statement recorded under Section 132(4) during a search operation is not considered "books of account," "documents," or "assets found or seized" for the purpose of initiating search assessments under Chapter XIVB (e.g., Section 158BD or 153C). Such a statement is created during the search and cannot solely form the basis for assessment without other incriminating material found.

Pr. CIT v. Best Infrastructure (I) Pvt. Ltd.
397 ITR 182 · High Court
53
citing judgments

Additions to income cannot be made solely on the basis of a statement or confession recorded during a search operation. Such additions require corroborating incriminating material or other independent evidence to be permissible.

Raja Bahadur Kamakhya Narain Singh v. CIT
77 ITR 253 · 1970 · Supreme Court
49
citing judgments

The Supreme Court clarifies the distinction between income chargeable as capital gains and income taxable as business profits, guiding the assessment of whether a transaction constitutes a transfer of a capital asset or is in the nature of trade.

Judgments on Section 44AD

Income Tax Officer, Barabanki vs. Sateesh Kumar, Barabanki

In the result, the appeal of the Revenue is dismissed

ITA 274/LKW/2024[2017-18]Status: DisposedITAT Lucknow25 Apr 2025AY 2017-18

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y. 2017-18 Income Tax Officer, Vs. Sateesh Kumar, Barabanki, U.P. H. No.9, Bhitariya, Ramsanehighat, H/O Baneekodar, Barabanki, U.P. Pan:Ctjpk3341N (Appellant) (Respondent) Assessee By: Sh. Shubham Rastogi, C.A. Revenue By: Sh. Sanjeev Krishna Sharma, Addl. Cit (Dr) Date Of Hearing: 02.04.2025 Date Of Pronouncement: 25.04.2025 O R D E R Per Nikhil Choudhary, A.M.: [ This Is An Appeal Filed By The Revenue Against The Order Of The Ld. Cit(A) Dated 13.03.2004 Partly Allowing The Appeal Of The Assesseee Against The Assessment Made Under Section 143(3) Of The Income Tax Act, 1961 On 24.09.2019. The Grounds Of Appeal Preferred By The Revenue Are As Under:- “1. Because On The Facts & Circumstances Of The Case, The Ld. Cit(A) Has Erred In Law & In Facts While Deleting The Addition Of Rs. 77,96,530/- Under Section 69A Of The I.T Act 1961 By Suo-Moto Taking The Bank Deposits As Turnover & Estimating The Profit @ 8% Of Rs. 95,83,320/- Ignoring The Fact That The Assessee Has Not Furnished Complete Details Of Bank Deposits, The Same Is Added To The Total Income Of The Assessee As Unexplained Money U/S 69A Of The I.T. Act. 1961. 2. That The Order Of Cit (A), Being Erroneous In Law & In Facts Be Cancelled & The Order Of The Ao Be Restored. 3. Any Other Grounds Arose During The Proceedings Of Appeal.”

For Appellant: Sh. Shubham Rastogi, C.AFor Respondent: Sh. Sanjeev Krishna Sharma, Addl. CIT
Section 115Section 142(1)Section 143(3)Section 144(1)(b)Section 44ASection 69A

Pradeep Kumar Gupta, Morena vs. ITO, Morena

The appeal stand allowed for statistical purposes

ITA 421/AGR/2024[2017-18]Status: DisposedITAT Agra22 Apr 2025AY 2017-18

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं. / Ita No. 421/Agr/2024 (िनधा"रणवष" / Assessment Year:2017-18) Shri Pradeep Kumar Gupta Income-Tax Officer, बनाम/ C/O Avantika Sales, Havells Ward-1, Morena. Galaxy, Morena Talkies Road, Vs. Morena (Mp). "थायीलेखासं./जीआइआरसं./Pan/Gir No. Agmpg-3818-Q (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : S/Sh. Nitin & Amit Goyal, Adv. - Ld. Ars " थ"कीओरसे/Respondent By : Sh. Shailender Shrivastava – Ld. Sr. Dr सुनवाईकीतारीख/Date Of Hearing : 21-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeal By Assessee For Assessment Year (Ay) 2017-18 Arises Out Of An Order Passed By Learned Commissioner Of Income Tax (Appeals), Nfac, Delhi [Cit(A)] On 20-03-2024 In The Matter Of An Assessment Framed By Ld. Assessing Officer [Ao] U/S. 143(3) Of The Act On 08-12-2019. The Registry Has Noted Delay Of 115 Days In The Appeal Which Stand Condoned. From The Case Records, It Emerges That The Case Was Subjected To Scrutiny To Examine The Issue Of Large Value Cash Deposits During Demonetization Period. During Assessment Proceedings, The Assessee Could Not Substantiate The Bank Credits. Ultimately, Ld. Ao Added Cash Deposit Of Rs.317.10 Lacs U/S 69A. On The Other Bank Credits For Rs.315.22 Lacs, Ld. Ao Estimated Business Income Of 6% As Per

For Appellant: S/Sh. Nitin & Amit Goyal, Adv. - Ld. ARsFor Respondent: Sh. Shailender Shrivastava – Ld. Sr. DR
Section 115BSection 143(3)Section 44ASection 69A

Rukmani Devi Jain, Agra vs. Pr.CIT.-1, Agra

The appeals stand allowed in terms of our above order

ITA 30/AGR/2021[2016-17]Status: DisposedITAT Agra22 Apr 2025AY 2016-17

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपीलसं./ Ita No. 29/Agr/2021 (िनधा"रणवष" / Assessment Year: 2015-16) & 2. आयकरअपीलसं./ Ita No.30/Agr/2021 (िनधा"रणवष" / Assessment Year: 2016-17) Smt. Rukmani Devi Jain Pr. Cit - 1 बनाम/ 37/396/17, Gopal Kunj Agra. Vs. Agra (Up)-282002. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Anxpj-7557-M (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Deependra Mohan, Ca – Ld. Ar " थ"कीओरसे/Respondent By : Dr. Arun Kumar Yadav – Ld. Cit-Dr सुनवाईकीतारीख/Date Of Hearing : 19-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. By Way Of These Appeals, The Assessee Assails Revision Of Order U/S 263 For Assessment Years (Ay) 2015-16 & 2016-17. First, We Take Up Appeal For Ay 2015-16 Which Assail Invocation Of Revisionary Jurisdiction U/S 263 By Ld. Pr. Commissioner Of Income Tax-1, Agra (Pr.Cit) Vide Impugned Order Dated 22-03-2021 In The Matter Of An Assessment Framed By Ld. Ao U/S 143(3) Of The Act On 24-12-2017. Having Heard Rival Submissions & Upon Perusal Of Case Records, Our Adjudication Would Be As Under.

For Appellant: Sh. Deependra Mohan, CA – Ld. ARFor Respondent: Dr. Arun Kumar Yadav – Ld. CIT-DR
Section 142(1)Section 143(3)Section 263Section 44A

Rukmani Devi Jain, Agra vs. Pr.CIT-1, Agra

The appeals stand allowed in terms of our above order

ITA 29/AGR/2021[2015-16]Status: DisposedITAT Agra22 Apr 2025AY 2015-16

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपीलसं./ Ita No. 29/Agr/2021 (िनधा"रणवष" / Assessment Year: 2015-16) & 2. आयकरअपीलसं./ Ita No.30/Agr/2021 (िनधा"रणवष" / Assessment Year: 2016-17) Smt. Rukmani Devi Jain Pr. Cit - 1 बनाम/ 37/396/17, Gopal Kunj Agra. Vs. Agra (Up)-282002. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Anxpj-7557-M (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Deependra Mohan, Ca – Ld. Ar " थ"कीओरसे/Respondent By : Dr. Arun Kumar Yadav – Ld. Cit-Dr सुनवाईकीतारीख/Date Of Hearing : 19-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. By Way Of These Appeals, The Assessee Assails Revision Of Order U/S 263 For Assessment Years (Ay) 2015-16 & 2016-17. First, We Take Up Appeal For Ay 2015-16 Which Assail Invocation Of Revisionary Jurisdiction U/S 263 By Ld. Pr. Commissioner Of Income Tax-1, Agra (Pr.Cit) Vide Impugned Order Dated 22-03-2021 In The Matter Of An Assessment Framed By Ld. Ao U/S 143(3) Of The Act On 24-12-2017. Having Heard Rival Submissions & Upon Perusal Of Case Records, Our Adjudication Would Be As Under.

For Appellant: Sh. Deependra Mohan, CA – Ld. ARFor Respondent: Dr. Arun Kumar Yadav – Ld. CIT-DR
Section 142(1)Section 143(3)Section 263Section 44A

Hari Mohan, Gujrat vs. DCIT-3, Mathura

The appeals stand partly allowed

ITA 363/AGR/2018[2012-13]Status: DisposedITAT Agra22 Apr 2025AY 2012-13

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपीलसं./ Ita No. 362/Agr/2018 (िनधा"रणवष" / Assessment Year:2012-13) & 2. आयकरअपीलसं./ Ita No. 363/Agr/2018 (िनधा"रणवष" / Assessment Year:2012-13) Shri Hari Mohan Dcit-3, बनाम/ 82, Chitrakut Apartments, Mathura. Near Bapu Dargah, Gorwa, Vs. Vadodara, Gujrat. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Ahppm-5638-N (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Anurag Sinha, Adv. – Ld. Ar " थ"कीओरसे/Respondent By : Sh. Shailender Shrivastava – Ld. Dr सुनवाईकीतारीख/Date Of Hearing : 20-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeals By Assessee For Assessment Year (Ay) 2012-13 Arises Out Of Separate Orders Of First Appellate Authority. First, We Take Up Appeal Ita No.363/Agr/2018 Which Arises Out Of An Order Passed By Learned Commissioner Of Income Tax (Appeals), Agra [Cit(A)] On 28-02- 2018 In The Matter Of An Assessment Framed By Ld. Ao U/S 144 On 04-03- 2015. Having Heard Rival Submissions, Our Adjudication Would Be As Under. 2. From Case Records, It Emerges That The Assessee Is A Civil Contractor & It Filed Returned Income Of Rs.16.52 Lacs. The Assessee

For Appellant: Sh. Anurag Sinha, Adv. – Ld. ARFor Respondent: Sh. Shailender Shrivastava – Ld. DR
Section 144

Hari Mohan, Gujrat vs. DCIT-3, Mathura

The appeals stand partly allowed

ITA 362/AGR/2018[2012-13]Status: DisposedITAT Agra22 Apr 2025AY 2012-13

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपीलसं./ Ita No. 362/Agr/2018 (िनधा"रणवष" / Assessment Year:2012-13) & 2. आयकरअपीलसं./ Ita No. 363/Agr/2018 (िनधा"रणवष" / Assessment Year:2012-13) Shri Hari Mohan Dcit-3, बनाम/ 82, Chitrakut Apartments, Mathura. Near Bapu Dargah, Gorwa, Vs. Vadodara, Gujrat. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Ahppm-5638-N (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Anurag Sinha, Adv. – Ld. Ar " थ"कीओरसे/Respondent By : Sh. Shailender Shrivastava – Ld. Dr सुनवाईकीतारीख/Date Of Hearing : 20-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeals By Assessee For Assessment Year (Ay) 2012-13 Arises Out Of Separate Orders Of First Appellate Authority. First, We Take Up Appeal Ita No.363/Agr/2018 Which Arises Out Of An Order Passed By Learned Commissioner Of Income Tax (Appeals), Agra [Cit(A)] On 28-02- 2018 In The Matter Of An Assessment Framed By Ld. Ao U/S 144 On 04-03- 2015. Having Heard Rival Submissions, Our Adjudication Would Be As Under. 2. From Case Records, It Emerges That The Assessee Is A Civil Contractor & It Filed Returned Income Of Rs.16.52 Lacs. The Assessee

For Appellant: Sh. Anurag Sinha, Adv. – Ld. ARFor Respondent: Sh. Shailender Shrivastava – Ld. DR
Section 144