AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 390
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....D of the Act. The Assessing Officer (hereinafter referred to as ld. 'AO') while computing the total taxable income added the amount of Rs. 57,071/- to the presumptive business income @ 6% of Rs. 9,51,201/- being difference in turnover as the ld. AO found that there was a turnover of Rs. 74,26,060/- instead of Rs. 64,74,859/-. The ld. AO has further added an amount of Rs. 25,37,352/- i.e. Rs. 20,26,817/- on account of sale of license and Rs. 5,10,535/- against duty drawback receipts during the year and further added Rs. 6,36,509/- under the head 'income from other sources'. The said order has been challenged by the assessee before the ld. CIT(A) wherein appeal of the assessee has been partly allowed as ld. CIT(A) in deciding the turnover for the purpose of presumptive taxation has held that during appellate proceedings the appellant claimed that the said difference amount represents four sale bills which were raised and accounted for by the appellant during FY 2016-17 relevant to AY 2017-18 and ld. CIT(A) has directed the ld. AO to verify the claim of the assessee and delete the addition if the claim of the assessee is found to be correct but the Ld. CIT(A) has dismissed the....
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....unsel for the assessee submits that receipts cannot be treated as ancillary receipts because assessee has already offered income @ 6% of the total turnover from eligible business in totality of his business income and not on item-wise basis. The ld. Counsel for the assessee in course of argument has submitted fresh computation of income and offered new offered to tax as per Section 44AD of the Act which according to him that income inadvertently not offered to tax earlier. He has filed a chart of fresh tax offered which is reproduced herein below: Shri Pradeep Modi PAN: AERPM6185R Asst. Year: 2018-19 Computation of Income Particulars As per ITR As per Ld. AO Now offered to Tax Turnover Income Turnover Income Turnover Income (A) Profits and Gains from "Business & Profession" Profit on presumptive Basis u/s 44AD @ 6% of Turnover a) Turnover 64,74,859 64,74,859 64,74,859 b) Addition to presumptive turnover by AO, but relief given by CIT(A) - 9,51,183 - c) Income Inadvertently not offered to tax earlier, no....
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....5,37,352/- as made by the ld. AO confirmed by the ld. CIT(A). It is important to mention here that the assessee has already offered income @ 6% of the total turnover from eligible business and in totality of his business and not on item-wise business. Going over the provisions of Section 44AD of the Act we find that there are two key words used for calculation of turnover; first, turnover and second, gross receipts. But the word 'gross receipts' has not been defined in the Income Tax Act. Section 28 of the Act defines the receipt from business and profession wherein it has been categorised that the income shall be chargeable to the income tax under the head 'profits and gains of business or profession'. The relevant extract is as under: "28. The following income shall be chargeable to income-tax under the head "Profits and gains of business or profession",- (i) the profits and gains of any business or profession which was carried on by the assessee at any time during the previous year; (ii) any compensation or other payment due to or received by,- (a) any person, by whatever name called, managing the whole or substantially the whole of the affairs of an Indian company, at o....
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....awback Rules, 1971, shall be chargeable to income-tax under the head "Profits and Gains of business or profession". 2.2. Ld. Counsel for the assessee has also drawn our attention to the Guidance Note of Tax Audit u/s 44AB of the Act issued by Institute of Chartered Accountant of India wherein it has been clarified that duty drawback is part of gross receipts for the purpose of calculation of turnover/gross receipts under the head "Business and Profession". Ld. Counsel for the assessee has also drawn our attention to the judgment of the Coordinate Bench of ITAT Delhi in the case of Sanjay Bahl vs. ITO in ITA No. 5709-5710/Del/2018 order dated 24.04.2019. Going over the said decision, relevant portions are reproduced herein below: "I have heard both the parties and perused the records, especially the impugned order. I find that the assessee has declared his business income u/s 44AD of the Act and the gross receipts/turnover has been shown as Rs. 21,38,294/- and profit has been declared as @ 8% of turnover which amounts to Rs. 1,71,064/- and as per Export Summary Data provided by CBEC, Rs. 1,22,983/- has been sanctioned to the assessee as Duty Drawback during the FY2014-15. The A....