Section 44AE of the Income Tax Act

Income-tax Act, 2025: s.58

Section 44AE 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 44AE is Goodyear (I) Ltd. v. ITO (73 ITD 189), cited in 27 of the 159 judgments on BharatTax that turn on this section.

Leading authorities on Section 44AE

Goodyear (I) Ltd. v. ITO
73 ITD 189 · 2000 · ITAT
27
citing judgments

Expenditure incurred for the transfer of the use of licenses, without acquiring ownership rights or an enduring benefit, constitutes revenue expenditure. Such payments are allowable as a deduction if they are directly relatable to services in the revenue field.

CIT v. Sidhartha Enterprises
322 ITR 80 · 2010 · High Court
23
citing judgments

Penalty under Section 271(1)(c) is imposed only when there is a deliberate default and not a mere mistake. The furnishing of inaccurate particulars must be a deliberate attempt to evade tax, not just a mistake.

DCIT v. Surface Finishing Equipment
81 TTJ 448 · 2003 · ITAT
23
citing judgments

Non-compliance with notices issued under section 133(6) alone is not a sufficient basis to deny the genuineness of expenditure incurred by a company. The assessee's obligation extends to providing correct names and addresses of parties, not ensuring their response.

(India) Limited v. Additional Commissioner of Income Tax
254 ITR 673 · 2002 · High Court
11
citing judgments

Ad hoc additions to income are not legally sustainable. Mere non-compliance with notices under section 133(6) does not invalidate genuine expenditure. Losses incidental to business should be allowed as deductions in the year of discovery.

(i) CIT v. Nikunj Eximp Enterprises Pvt. Ltd.
77 Taxmann.com 275 · 2017 · ITAT
11
citing judgments

The recording of purchase transactions and subsequent export of goods in the books of accounts can prove the genuineness and veracity of such purchase transactions.

IT vs. Kerala Transport Co. (1994) 51 ITD (Coch) 405 (iv)Om Prakash Joshi v. ITO
102 TTJ 882 · 2006 · ITAT
10
citing judgments
Commissioner of Income Tax v. Harsh D Mehta
251 Taxmann 346 · 2017 · High Court
9
citing judgments
(i) CIT vs Jalaram Oil Mills (2001) 171 CTR (GUj) 426 (ii) Vishwakarma Industries v. CIT
135 ITR 652 · 1982 · High Court
8
citing judgments
ITO v. Shantilal Chuni-lal & Co.
45 ITD 581 · 1993 · ITAT
7
citing judgments
ITO v. Bindra Ban Bansi Lal
78 ITD 228 · 2001 · ITAT
6
citing judgments

Judgments on Section 44AE

Sri Naresh Kumar Sharma, Kolkata vs. ITO, Ward - 48(3), Kolkata

In the result, the appeal of the assessee is allowed

ITA 1486/KOL/2017[2012-13]Status: DisposedITAT Kolkata31 Oct 2017AY 2012-13

Bench: Hon’Ble Shri P.M. Jagtap] I.T.A. No. 1486/Kol/2017 Assessment Year : 2012-13 Shri Naresh Kumar Sharma.............................…………………………………Appellant C/O Sri Jitendra Kaushik, Advocate, 19D, Muktaram Babuy Street, Kolkata - 700007 [Pan : Akups6148K] Income Tax Officer...................……………………………………………….......Respondent Ward 48(3) 3, Govt. Place (W) Kolkata - 700001 Appearances By: Shri Jitendra Kaushik, Advocate Appearing On Behalf Of The Assessee. Shri Robin Chowdhury, Addl. Cit Appearing On Behalf Of The Revenue. Date Of Concluding The Hearing : October 05, 2017 Date Of Pronouncing The Order : October 31, 2017 Order This Appeal Filed By The Assessee Is Directed Against The Order Of Ld. Cit (Appeals) 14, Kolkata, Dated 28.04.2017 & The Grounds Raised By The Assessee Therein Read As Under: 1. For That On The Facts & Circumstances Of The Case, The Ld. Cit (A) Erred In Law As Well As On Facts In Not Considering That The Ld. Assessing Officer Erred In Not Completing The Assessment By Applying The Provision Of Section 44Ae Of The Act, 1961 2. For That On The Facts & In The Circumstances Of The Case, Without Prejudice The Ground No 1 The Ld. Commissioner Of Income Tax (Appeals) Erred In Confirming The Addition Made By The Ld. Assessing Officer Of A Sum Of Rs. 21,52,648/- Under The Head ‘Undisclosed Income’.

Section 143(3)Section 44ASection 80C