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2024 (6) TMI 874 - ITAT MUMBAIDetermination of income from transaction in derivatives (futures) transactions - presumptive taxation u/s. 44AD opted - application of profit rate - HELD THAT - As we find that ld. AO has made addition without sharing any information about the alleged transaction available on the system. The ld. CIT(A) on the other hand had accepted the total turnover of Rs. 42,61,003/- as disclosed by the assessee, however, without assigning any reason he has estimated profit rate of 50%. If the turnover has been accepted by the ld. CIT(A), then there is no justification of applying such a huge profit rate of 50% and since assessee has opted for presumptive taxation u/s. 44AD, then 8% as provided in the statute is liable to be accepted. Appeal of the assessee is allowed. Issues involved:
The judgment involves the appeal filed by the assessee against the order passed by NFAC, Delhi u/s. 143(3) for the A.Y. 2015-16 regarding income from transaction in derivatives and the application of profit rate. Details of the Judgment: 1. The assessee declared income from futures transactions and offered income u/s. 44AD @8% for A.Y. 2015-16. The ld. AO applied 8% profit rate based on system information of share transactions under the assessee's PAN, resulting in a profit of Rs. 41,94,239. The difference in income led to addition u/s. 68 of the I.T. Act and initiation of penalty proceedings u/s. 271(1)(c). 2. The ld. CIT(A) estimated profit @50% on the total turnover declared by the assessee without verifying the alleged transactions. The CIT(A) accepted the turnover but applied a high profit rate. The Tribunal noted that if the turnover is accepted, the prescribed 8% profit rate u/s. 44AD should be applied, not 50%. 3. The Tribunal found that the AO made additions without sharing information about the alleged transactions, while the CIT(A) accepted the turnover but applied an unjustified profit rate. As the assessee opted for presumptive taxation u/s. 44AD, the prescribed 8% profit rate should be accepted. Therefore, the appeal of the assessee was allowed. Separate Judgment: There is no separate judgment delivered by the judges in this case.
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