9911796707
TMI Blog2017 (2) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has filed his return u/s 44AF, no further disallowance can be made u/s 40A(3). It is noteworthy that in this case no trading irregularity was found and addition has been sustained only on technical issue of Section 40A(3) of the Act. The presumptive system of tax u/s 44AF starts with nonobstante clause and overrides other provisions. In view thereof, there is no justification in making the addition which is deleted. Since the addition is deleted on merits, there is no need to go into alternative ground. Thus the appeal of the assessee is allowed. - ITA No. 1138/JP/2016 - - - Dated:- 27-2-2017 - SHRI BHAGCHAND, ACCOUNTANT MEMBER For the Assessee : Shri Tarun Mittal Shri Manish Agarwal (CA) For the Revenue : Shri Raj Meh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover of the assessee is covered under section 44AD of the Act. Now the only bone of contention is whether the section 40A(3) would be applicable when the income declared is covered under the provisions of section 44AD of the Act? It would be worthwhile to reproduce provision of section 44AD of the Act; 44AD (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Gopalsingh R Rajpurohil v/s ACIT, (supra), I hold that once the assessee has filed his return u/s 44AF, no further disallowance can be made u/s 40(3) of the Act. It is noteworthy that in this case no trading irregularity was found and addition has been sustained only on technical issue of section 40A(3) of the Act. The presumptive system of tax u/s 44AF starts with non-obstante clause and overrides other provisions. In view thereof, there is no justification in making the addition which is deleted. Since the addition is deleted on merits, there is no need to go into alternative ground. Thus the appeal of the assessee is allowed. Thus in view of the factual matrix of the case and provisions of the Act and also taking into ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptive basis i.e. @ 5% net profit and no further addition can be made. In this regard nothing is wrong in the trading activities and there has been found a technical issue of Section 40A(3) of the Act. (ii) Section 44AF begins with a non-obstante clause and specifically bars the application of provisions of Section 28 to 43C which includes Section 40A(3) as well. Therefore, it is clear that when the has declared his income u/s 40A(3) of the Act, no further disallowance u/s 40A(3) can be made, (iii) The ld. AR relied on the case of ITAT Ahemdabad Bench in the case of Gopalsingh R Rajpurohit vs. ACIT, 94 TTJ 865 wherein it has been held that once the return is filed u/s 44AF no further disallowance could be made u/s 40A(3) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
