TaxTMI 
TaxTMI 
2024 (11) TMI 390
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.... as per the deeming provisions of Section 44AD 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....
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....already offered tax on the total turnover of Rs. 64,74,859/-. The ld. Counsel 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) Add....
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....er. 2. We have perused the record and find that the assessee is engaged in export business of leather goods and during the year under consideration his total turnover from export sales was Rs. 64,74,859/-. It admits of no doubt that ld. CIT(A) after considering the sale bills and ledger account considered the case of the assessee regarding his turnover being genuine. So, this point is not in dispute that total turnover of the assessee during the year under consideration was Rs. 64,74,859/- and not Rs. 74,26,060/-. 2.1. Now, coming to the next point i.e. addition of Rs. 25,37,352/- 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 shal....
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....he Duty Remission Scheme under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992); (iiie) any profit on the transfer of the Duty Free Replenishment Certificate, being the Duty Remission Scheme under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992);" As per plain reading of sub clause (iiia) and (iiic) of section 28, it has been clarified that any duty of customs or excise re-paid or re-payable as drawback to any person against exports under the Customs and Central Excise Duties Drawback 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 atten....