2026 (6) TMI 465

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....ne "M/s Ambica Group", certain incriminating documents were found and seized. The AO has reproduced Invoice No. B10935 dated 11.11.2023 issued by M/s Ambica Ashish Trade Link LLP on Page No. 2 of assessment-order. This invoice is claimed to have been confronted to Shri Tejas Vikrambhai Modi, Logistics Manager of the godown, vide Q.No. 16 of the statements recorded during search, which is re-produced in AO's order. The AO considered statement of Shri Tejas and an excel sheet and came to a conclusion that the assessee made unaccounted cash transaction of purchase of Rs. 2,40,950/- from M/s Ambica Trading Co. & M/s Bahucharkrupa Trading Company. Accordingly, the AO issued notice dated 30.03.2024 to assessee. In response, the assessee re-filed return on 29.08.2024 repeating the original income of Rs. 2,76,580/-. (ii) Thereafter, the AO issued notices u/s 143(2)/142(1) which remained partly complied with by assessee. During proceedings, the assessee filed copies of Bank Statement, ITR Acknowledgement, Computation of Income, Ledger accounts, Annual Sale Purchase Account, GSTR-4, etc. which is acknowledged by AO in Para 3 of assessment-order. The Ld. AO has, however, noted that t....

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....nagar. (ii) That the assessee has no other source of income except the above business. (iii) That for the year under consideration, the assessee filed return of income u/s 139 in form "ITR-4-Sugam" which is applicable to an assessee engaged in the business covered under presumptive provisions of section 44AD, 44ADA and 44AE. The assessee declared a business turnover of Rs. 13,82,811/- and net profit of Rs. 2,76,580/- u/s 44AD. The assessee re-filed very same return of income in response to notice u/s 148. (iv) That the assessee was having an absolute exemption from maintaining books of account and documents since he opted for presumptive taxation u/s 44AD. Therefore, the assessee has not maintained any books of account or document. (v) That, the Invoice No. B10935 dated 11.11.2023 issued by M/s Ambica Ashish Trade Link LLP re-produced by Ld. AO on Page No. 2 of assessment-order, which is the basis for alleging unaccounted purchase by assessee, is in the name of "M/s Jay Ambe Fataka Bhandar" and it nowhere contains name of assessee. Therefore, the said invoice is not at all concerning present assessee. (vi) That the observation given by L....

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....#2381;ष को रखा है। मैं आपसे पहले भी निवेदन कर चुका हूँ कि M/s अंबिका ट्रेडिंग कंपनी एवं M/s बहुचर कृपा कंपनी द्वारा मेरा नाम कहाँ से दर्ज किया, इसका मेरे पास कोई प्रमाण नहीं है, उन दोनों डीलर्स से मेरे द्वारा जो माल खरी&#2342....

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....66;री होने के बावजूद पूर्णतः ईमानदारी एवं सत्यनिष्ठा से शासन को कर का भुगतान किया जा रहा है, इसके उपरांत भी अगर आप मेरे विरूद्ध धारा 69A व धारा 115BBE का प्रयोग करते हैं, तो वह मेरे लिए बहुत बड़ा दंड होगा क्योंकि पूरे वर्&....

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....6;क : 16/11/2024 करदाता हस्ता/- (विशाल भंडारी)" In above reply, Ld. AR submitted, the assessee made a vehement submission qua the unaccounted purchase alleged by Ld. AO. (vii) Thus, the assessee did not make any unaccounted purchase of goods as alleged by Ld. AO. Hence, no addition is warranted. (viii) Lastly, Ld. AR submitted that the assessee has opted for presumptive taxation u/s 44AD. He submitted that in terms of section 44AD, an assessee can be taxed for the element of presumptive income only and the assessee is entitled to exemption from maintenance of books of account, documents and giving explanation of purchase, expenses, etc. Further, the alleged amount of unaccounted purchase is just Rs. 2,40,950/- and the assessee desires to close litigation. Therefore, he would be satisfied if the element of presumptive income u/s 44AD from the alleged purchase of Rs. 2,40,950/- is accepted. In that event, Ld. AR further prayed that a clear direction be issued to the Ld. AO that the provision of section 115BBE sha....

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....ion u/s 44AD is statutorily not required to maintain books of account and documents. Consequently, such assessee cannot be expected to explain each individual purchase transaction or cash flow in the manner contemplated under regular provisions. To impose an addition u/s 69A in such circumstances, on the basis of a document not even bearing the assessee's name, would be to impose an obligation which the statute itself does not cast upon the assessee. (iv) The statement of Shri Tejas Vikrambhai Modi, Logistics Manager of the godown, was recorded in the course of search operations upon M/s Ambica Group. It is settled law that a statement recorded in the course of third-party proceedings, without giving assessee an opportunity to cross-examine the deponent and without any independent corroborating evidence linking assessee to alleged transaction, cannot be the sole basis for making an addition in the hands of assessee. 10. That said, having regard to the totality of facts and circumstances and with a view to bring finality to the litigation between the assessee and the revenue, we find merit in the alternative and agreeable proposal put forth by Ld. AR, which has also ....