TaxTMI 
TaxTMI 
2015 (2) TMI 254
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....al (ITAT) was correct in holding that the addition of Rs. 47,37,120/- brought to tax by the Assessing Officer (AO) was unwarranted. 2. The assessee during the relevant Assessment Year (AY) 2005-06 claimed benefit of Section 44AF of Income Tax Act (hereinafter referred as "the Act"), and had filed a return disclosing income of Rs. 2,15,292/-. Subsequently, the assessment was reopened under Section 147 of the Act. Assessing Officer (AO) framed an assessment under Section 144 since no response was forthcoming on the part of the assessee. The AO considered the source of a separate cash deposit of Rs. 31,29,880/- and further amount of Rs. 16,07,240/-. After adding these amounts, the AO reassessed the income on regular basis bringing them to tax....
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.... further finding that the bank statement for the relevant period from 01/04/2004 to 31/03/2005 was examined by the CIT(A) and it was found that there was cash deposit on various dates against the sale of material and the withdrawal refers to payment made against such purchases of the material. As per Sec. 44AF, which prescribes the special provision for computing profits & gains of retail business, a sum equal to 5% of the total turn over in the previous year on account of such business, the profit can be qualified. The Id. CIT(A) on the basis of facts of assessment year 2008-09 quantified the net profit rate at 5% and ultimately held that the amount of Rs. 2,87,403/-was only assessable from undisclosed business. No other material was broug....
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....d others of such category as are covered by the provision is subject to ceiling for turnover of Rs. 40 lacs. The underlying principle is that the Income Tax authority accepts the entire figures furnished by the assessee at face value and there will be a presumptive rate of net profit which would be further subjected to taxation. 5. In the present case the assessee had sought the benefit of that provision but the revenue found later that the amounts deposited in its account were far and excessive than what was disclosed. That the assessee did not dispute the deposit of Rs. 16 lacs ipso facto would not absolve him from failing to disclosed it in the first instance. The same reasoning would apply for the other amount of Rs. 31,29,880/-. So fa....