2022 (4) TMI 851

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....or the Assessment Year 2013 - 2014 u/s.143(3) of the Income Tax Act, 1961, (hereinafter 'the Act') vide order dated 31.03.2016. 2. The only issue raised by the Revenue in this appeal is against the order of the CIT(A) in holding that once the Assessee is assessed u/s.44AD of the Act and that he fulfilled the conditions, no addition can be made. For this, the Revenue has raised the following grounds, as under: "2.1. The learned CIT(A) erred in holding that no addition u/s.28 to 43C can be made when the Assessee has filed return of income u/s.44AD of the Act, which is factually not correct. 2.2. The learned CIT(A) erred in taking business income at Rs. 4,98,560/- instead of Rs. 2,89,476/- because interest income of Rs. 2,....

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....d. Vs. ITO (Guj) 249 Taxman 443" 3. Brief facts are that the Assessee is a dealer in home appliances and filed his return of income by declaring income at Rs. 4,98,560/- on the total turnover of Rs. 60,87,980/-. Apart from that the Assessee has received interest income of Rs. 2,09,084/-. The Assessee, chose to declare presumptive income u/s.44AD of the Act, applying the profit rate at 8% of the total turnover of sales made by the Assessee and thereby declared income at Rs. 4,98,560/-. The Assessing Officer selected the case for scrutiny through Computer Aided Scrutiny Selection [CASS] and issued notice u/s.143(2) of the Act. According to the Assessing Officer, there are sundry creditors amounting to Rs. 2,25,13,545/- and accordingly enqu....

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.... that has ceased to exist only in the concerned PY when the liability actually ceased to exist. It cannot be treated as cessation of liability in the PY relevant to the Assessment Year 2013 - 2014. (xiv) Therefore the addition made by the Assessing Officer of the amount of Rs. 2,24,73,708/- u/s.41(1) of the Income Tax Act, 1961 is not factually and legally tenable and hence not justified and needs to be set aside and deleted." Aggrieved, the Revenue is now in appeal before the Tribunal. 5. We have heard the rival contentions and had gone through the facts and circumstances of the case. We noted that the Assessee has offered its income in the return of income in a presumptive basis u/s.44AD of the Act. Admittedly, the Assessee....