Presumptive taxation under section 44AD cannot sustain bogus purchase additions on third-party information alone without independent enquiry.

Bonafide reliance on professional advice was treated as sufficient cause for condoning a 65-day delay, where the assessee supported the explanation with an affidavit and a chartered accountant's certificate and the Revenue did not effectively dispute the facts. In a presumptive taxation assessment under section 44AD, an addition for alleged bogus purchases was held unsustainable where it rested only on GST information, despite the assessee producing purchase details and supporting material. The absence of independent enquiry or contrary evidence meant the disallowance could not be upheld, and the purchase addition was directed to be deleted.

---

---

Issues: (i) Whether the delay of 65 days in filing the appeal deserved condonation on the basis of bonafide reliance on professional advice; (ii) Whether, in a case assessed under presumptive taxation under section 44AD, an addition towards alleged bogus purchases could be sustained without independent enquiry.

Issue (i): Whether the delay of 65 days in filing the appeal deserved condonation on the basis of bonafide reliance on professional advice.

Analysis: The delay was supported by an affidavit and a certificate from the earlier chartered accountant. The explanation showed that the assessee acted under a bonafide belief created by professional advice that no appeal was required. The record also showed that the Revenue did not effectively contest the factual explanation. The delay was treated as arising from sufficient cause.

Conclusion: The delay was condoned and the appeal was admitted.

Issue (ii): Whether, in a case assessed under presumptive taxation under section 44AD, an addition towards alleged bogus purchases could be sustained without independent enquiry.

Analysis: Under presumptive taxation, the assessee was not required to maintain regular books of account or separately prove purchase entries in the manner applicable to normal assessments so long as the statutory turnover limit was not crossed. The addition was made only on information received from the GST department, despite the assessee having furnished purchase details, GST particulars and other supporting material. No independent verification or contrary evidence was brought on record to dislodge the assessee's explanation. The addition was therefore unsustainable.

Conclusion: The addition towards alleged bogus purchases could not be sustained and was directed to be deleted.

Final Conclusion: The appeal succeeded, the procedural delay stood excused, and the impugned addition was deleted on the basis that presumptive taxation under section 44AD did not justify the disallowance made merely on third-party information without enquiry.

Ratio Decidendi: Where income is assessed under presumptive taxation and the turnover limit is not exceeded, a purchase addition cannot be sustained merely on third-party information without independent enquiry or contrary evidence, and bonafide reliance on professional advice can constitute sufficient cause for condonation of delay.

---