Provisions of Sec. 68 Couldn’t be Invoked if Assessee Declared Income on Presumptive Basis u/s 44AD | ITAT
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Case Details: Sumit Gahlot v. Income-tax Officer - [2023] 152 taxmann.com 185 (Jodhpur-Trib.)
Judiciary and Counsel Details
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- Kul Bharat, Judicial Member & Manish Borad, Accountant Member
- Amit Surana, CA for the Appellant.
- S.M. Joshi, JCIT-DR for the Respondent.
Facts of the Case
The assessee is an individual engaged in the business of trading. The assessee offered the income under section 44AD on presumptive basis while furnishing the return of income. During the scrutiny proceedings, the Assessing Officer (AO) called for the details of sundry debtors and creditors. Unsatisfied with the explanation, AO made additions under section 68 to the income of the assessee.
On appeal, CIT(A) upheld the order of AO, and an appeal was filed to Jodhpur Tribunal.
ITAT Held
The Tribunal held that the AO did not dispute the amount of revenue or gross receipt declared by the assessee by placing any contrary material. The details called for by the AO mainly include sundry debtors and creditors.
It should be noted that the assessee was not required to maintain proper books of account since he opted for presumptive taxation under section 44AD. Thus, there was no merit in AO calling for the details of sundry creditors and further adding under section 68 for unexplained sundry creditors. Since the assessee was admittedly not required to maintain the books of account, there was no basis for invoking the provision of section 68.
Thus the addition made for unexplained sundry creditors deserved to be deleted.
List of Cases Referred to
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- Collector, Land Acquisition v. Mst. Katiji 1987 taxmann.com 1072 (SC)/167 ITR 472 (para 2.3).
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