9911796707
TMI Blog2024 (6) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... , from it s business operations. However, there is no restriction to the assessee to offer the income u/s. 44AD of the Act on presumptive basis. We also find that the Ld. AO has not disputed the gross collections nor found any incriminating material for concealment of income. Accordingly, the assessee has offered an amount of Rs. 5,35,688/- under the presumptive taxation. AO proposed to tax the balance of Rs. 21,40,708/-, which the Managing Trustee, accepted to offer the same to tax, while recording statement u/s 132(4) of the Act. From the above, discussions, we find that the assessee has disclosed the entire cash receipts and the business receipts, while filing the return of income, but has claimed exemption on the above income based on the provision for expenses. AR s argument that even if the provision is excluded the trust has fulfilled 85% complying with section 11(1) of the Act was also not disputed by the Ld. AO. We have examined the above fact and are of the view that the trust has complied with section 11(1) of the Act. Respectfully following the ratio laid down in CIT Vs. M/s Shakthi Industries [ 2014 (8) TMI 1248 - ANDHRA PRADESH HIGH COURT] we are of the view that mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh was declared by the assessee, whereas, it is in the nature of business receipts and not in accordance with the bye laws of the Trust. The assessee has offered income under presumptive taxation in respect of the receipts received under cash collection charges. The Ld.AO observed that in lieu of supply of labour, the assessee has received cash collection charges from VVMPCL, which is a clear business activity and is not covered u/s 2(15) of the Act and also not covered under the objective of the Trust. The Ld.AO found that Shri Adari Tulasi Rao Managing Trustee of the Trust in his sworn statement u/s 132(4) of the Act, recorded on 13.12.2016 admitted a sum of Rs. 98 lakhs as business income for various assessment years from 2010-11 to 2016-17, as detailed in the assessment order. The Ld.AO considering the admission of the Managing Trustee concluded that the assessee has not disclosed the profit of Rs. 21,40,708/- as per the Profit Loss Account, whereas the assessee has declared income on presumptive basis. The Ld. AO however has not disputed the gross income of the assessee. He therefore added an amount of Rs. 21,40,708/- to the returned income of the assessee. Further, the Ld.AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the AO be sustained. The Ld.DR relied on the following case laws : i. Hon ble Supreme Court of India in the case of MAK Data (P.) Ltd. Vs. Commissioner of Income Tax-II, Civil Appeal No. 9772 of 2013, 358 ITR 593(SC) II. Hon ble Bombay High Court in the case of Dr.Nitin Laxmikant Lad Vs. Asst. Commissioner of Income Tax 6. Per contra, the Ld.AR argued that prima facie, there is no concealment and referred to page No.24 of the paper book, wherein, the computation of total income is enclosed. The Ld.AR submitted that on perusal of the computation statement, the assessee has disclosed total receipts of Rs. 40.41 crores and expenditure of Rs. 40.59 crores which includes the provision of Rs. 6,00,26,300/-. He argued that even if the provision for Rs. 4.10 crores (net of actual amount spent subsequently) is deducted from the actual expenditure incurred, net expenditure comes to Rs. 36.49 crores, which is over and above 85% of the total receipts. He therefore pleaded that the addition made by the Ld.AO on account of non-consideration of the provision made in the books of accounts is not concealment of income or furnishing inaccurate particulars, but only the bonafide belief that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total Rs. 6,00,26,300/-, but has reversed the provision of Rs. 4,10,89,602/- in the subsequent year without incurring actual expenditure. There is merit in the argument of the Ld.AR that even if the amount of Rs. 4,10,89,602/- is considered as not spent the Trust has fulfilled the obligation of incurring 85% of total receipts towards charity, amounting to Rs. 36.49 Crs, which is not disputed by the revenue authorities. Further, it is also found that the assessee has disclosed the cash collection receipts as business income, but has offered into tax by invoking the provisions of section 44AD of the Act under presumptive taxation scheme. During the search and seizure, it was found that the actual profit for the impugned assessment year, from it s business operations amounted to Rs. 26,76,396/-. However, there is no restriction to the assessee to offer the income u/s. 44AD of the Ac t on presumptive basis. We also find that the Ld. AO has not disputed the gross collections nor found any incriminating material for concealment of income. Accordingly, the assessee has offered an amount of Rs. 5,35,688/- under the presumptive taxation. The Ld.AO proposed to tax the balance of Rs. 21, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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