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TMI Blog2015 (10) TMI 2561X X X X Extracts X X X X X X X X Extracts X X X X ..... n page 3 of his assessment order which shows that against the receipt of ₹ 30.55 lacs, the assessee has shown expenses of ₹ 12.64 lacs resulting in a surplus of ₹ 17.90 lacs against which the assesee has declared income of ₹ 2.10. lacs only u/s 44AE of the Act. As per the provisions of section 44AE such income is taxable even if the assessee has not maintained books of accounts. When the assessee has shown a cash surplus of ₹ 17.92 lacs as against the declared income of ₹ 2.10 lacs such excess cash surplus has to be explained. If the assessee is claiming to have trade creditors to the tune of ₹ 9,80,000/-, he is bound to substantiate the same, if required to do so. Although the assessee is not re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction as confirmed by the Commissioner of Income Tax (Appeals) is highly unjustified and incorrect and even no opportunity was provided to the appellant. 3. That in any view of the matter once the net profit rate was applied by the assessee as per the provisions of section 44AE of the Income Tax Act then no further addition should have been made in respect of trade creditors therefore the addition of ₹ 9,80,000.00 made by the assessing officer and confirmed by the Commissioner of Income Tax (Appeals) is highly unjustified and incorrect in the facts and circumstances of the case. 4. That in any view of the matter observations and findings of the two lower authorities in their orders for making and confirming the addition ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... queries of the AO were complied with by the assessee. During the course of assessment proceedings, the AO observed that there was an increase in the fixed assets i.e. trucks during the year and that there was also a substantial increase in the balances in bank during the year. A new liability of ₹ 9,80,000/- was shown as trade creditors in the Balance Sheet on 31/03/2006. Through a specific inquiry by the AO, the assessee was required to furnish complete names and addresses of the trade creditors as shown in the statement of affairs. He was also required to furnish the confirmed copy of accounts as appearing in the books of such creditors. However the assessee submitted that records of the trade creditors were not maintained during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 74 of 2009 in the case of CIT-I, Kanpur vs. Shri Nitin Soni in which the Hon ble High Court has held that the very purpose and idea of enactment of section 44AE is to provide hassle free proceedings and that such an assessee is not required to maintain any account books. 4. Ld. DR on the other hand supported the order of the Ld. CIT (A). 5. We have considered the rival submissions and perused the material available on record and gone through the orders of the authorities below. We find that the isuse in dispute has been decided by the Ld. CIT (A) in Paras 2 and 3 of his order which read as under :- 2. Notices dated 22-08-2012, 07-09-2012 and 20-11-2013 u/s 250 of the I.T. Act, 1961 are issued for asses see's compliance on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and transactions details of the creditors. In the absence of these details, the claim of the assessee regarding sundry creditors is not acceptable particularly when there was no such creditor in the year ended on 31.3.2005 and the nature of business is stated to be the same. The AO has also reproduced the cash flow statement on page 3 of his assessment order which shows that against the receipt of ₹ 30.55 lacs, the assessee has shown expenses of ₹ 12.64 lacs resulting in a surplus of ₹ 17.90 lacs against which the assesee has declared income of ₹ 2.10. lacs only u/s 44AE of the Act. As per the provisions of section 44AE such income is taxable even if the assessee has not maintained books of accounts. When the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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