AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 1240
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....thin the due date. As and when the assessee got the penalty notice regarding the same assessment, the assessee contacted his authorized representative for further course of action and was advised to file the appeal before the Tribunal. In the above circumstances, he prayed that the delay in filing the appeal before the Tribunal may be condoned and the appeal may be treated as filed within the due date. In support of his claim, the assessee has also filed a copy of medical certificate dated 15/10/2019 and discharge certificate from St. Gregorios Medical Mission Hospital, Pathanamthitta. 3. The Ld. DR has not seriously opposed to the condonation petition. 4. We have gone through the condonation petition. As seen from the facts narrated in the petition, we find that there was sufficient cause for not filing the appeal within the due date and the reason advanced by the assessee is good and sufficient to condone the delay in filing the appeal. Hence, we condone the delay of 231 days in filing the appeal and admit the appeal for adjudication. 5. The facts of the case are that the assessee filed return of income for A.Y. 2015- 16 on 16/03/2017 declaring total income of Rs. 3,37,160/-. ....
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....er disclosed the credits found in the Bank account nor explained the sources for the complete credits. Therefore, the Assessing Officer quantified the explained deposits in the Bank account to Rs. 27,94,306/- and assessed under section 68 of the Act. The CIT(A) held that the provisions of section 68 of the Act are not applicable to the case of the assessee. According to the CIT(A), the Assessing Officer gave a finding that the assessee was not maintaining books of account and therefore, provisions of section 68 of the Act cannot be applied to tax the unexplained deposits in the Bank. However, the same can be taxed under section 69A of the Act. According to the CIT(A), quoting of wrong section is not fatal to the addition made and hence, it was held that the unexplained deposits in the Bank account are assessable under section 69A of the Act. 6.1. The CIT(A) noticed that the assessee neither in the assessment proceedings nor in the appeal proceedings produced any evidence to prove that the deposits in the Bank account represent the business receipts. Further, the Assessing Officer excluded the business receipts to the extent the payments made by the assessee to pharmaceutical comp....
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....the assessee's explanation that the said deposits relate to cash sales except making a preposterous assertion that it was not acceptable. It was submitted that except for the small retail trade, the assessee had no other business. It was submitted that even though the assessee could not bring any corroborative evidence for the undisclosed cash sales, it was to be appreciated that Sec 68 is a rule of evidence and the Assessing Officer is expected to consider the explanation rendered in the context of circumstance of each case. 7.2 Reliance was placed on the judgment of the ITAT Delhi Bench in the case of Shamsher Sigh Gill, Haridawr v ITO , Haridwar. The Ld. AR also relied on the view upheld by ITAT Cochin Bench in the case of A R Balakrishna Reddiar and Sons V ITO, Ward -1, Alleppey where it was held that "if it is the case of AO that the credit entries appearing in the bank account are in respect of the transactions of the firm, then what will be assessable is the profit earned by the firm and not the entire amount as it is the nature of suppressed sales on the factum that the assesses is engaged in the business as a wholesale dealer of reputed companies. Further, the Ld. AR plac....
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....maintaining books of account and other records. Tax is levied on presumptive basis. The Haryana High Court in the case of CIT vs. Surinder Pal Anand [2010] 192 taxmann 264), under identical circumstances had held as follows'.- "7. Section 44AD of the Act was inserted by the Finance Act, 1994 with effect from 1-4-1994. Sub-section (1) of section 44AD clearly provides that where an assessce is engaged in the business of civil construction or supply of labour for civil construction, income shall be estimated at 8 per cent of the gross receipts paid or payable to the assessee in the previous year on account of such business or a sum higher than the aforesaid sum as may be declared by the assessee in his return of income notwithstanding anything to the contrary contained in sections 28 to 43C of the Act. This income is to be deemed to be the profits and gains of said business chargeable of tax under the head "profits and gains" of business. However, the said provisions are applicable where the gross receipts paid or payable does not exceed Rs. 40 lakhs. 8. Once under the special provision, exemption from maintaining of books of account has been provided and presumptive tax at th....
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....its & gains' of business shall be deemed to be @ 8% or any higher amount. The first important term here is 'deemed to be' which proves that in such cases there is no income to the extent of such percentage, however, to extent, income is deemed. It is undisputed that 'deemed' means presuming the existence of something which actually is not. Therefore, it is quite clear that though for the purpose of levy of income tax 8% or more may be considered as income, but actually this is not the actual income of the assessee. This is also the purport of all provisions relating to presumptive taxation. 11. Putting the above analysis, in converse, it can be easily inferred that the same is also true for the expenditure of the assessee. If 8% of gross receipts are 'deemed' income of the assessee, the remaining1 92% are also 'deemed' expenditure of the assessee. Meaning thereby that actual expenditure may not be 92% of gross receipts, only for the purposes of taxation, it is considered to be so. To take it further, it can be said that the expenditure may be less than 92% or it may also be more than 92% of gross receipts. 12. Further, on the reading on the substan....
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.... so, in view of the fact that his income has been assessed as per section 44AD of the Act, he cannot be punished for not maintaining the same. 9.5 Now coming to the argument of the learned D.R. that the addition has been made under section 69A of the Act, on which there is no bar under section 44AD of the Act, we are quite in agreement with the same. The only fetter provided under section 44AD of the Act are the applicability of provisions of sections 30 to 38 of the Act. The provisions of section 69A of the Act reads as under: "Unexplained expenditure, etc.- Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explantation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assesses for such financial year; Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of inco....