2026 (8) TMI 192

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ursuant to the directions of Ld. Dispute Resolution Panel-2, Bengaluru-1 ('DRP' in short) u/s. 144C(5) of the Act dated 27.12.2025. 2. The assessee, an individual, was engaged in the business of running a supermarket under the name "Quality Mart" during the relevant previous year. The business was discontinued with effect from 01.02.2020 owing to continuous losses and was followed by the COVID-19 lockdown. The assessee filed the original return declaring income u/s. 44AD however, due to an inadvertent error by the tax consultant, the return was filed in ITR-1 instead of ITR-4, resulting in incorrect reporting of business income. Upon receipt of notice u/s. 148, the assessee filed a fresh return in the prescribed form declaring presum....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....returned to India in 2017 and had stayed in India for more than 182 days during the relevant previous year, as evidenced by the passport produced before the AO and the ld.DRP. It was contended that the residential status was wrongly determined merely on the basis of PAN jurisdiction without any examination u/s. 6 of the Act. 5. On the addition u/s. 69C, it was submitted that the cash withdrawals were made from a fully disclosed GST-linked business account out of accepted business receipts and were utilised for business purposes such as purchase of stock, payments to suppliers, farmers and employees. It was argued that once income had been accepted u/s. 44AD, maintenance of detailed books was not mandatory and the same business receipts c....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....of section 6 or verification of the period of stay in India. Likewise, though the Assessing Officer accepted the turnover disclosed in the GST returns and computed income u/s. 44AD, the addition u/s. 69C has been made in respect of cash withdrawals from the same disclosed business bank account without recording a clear finding as to the nature of the alleged unexplained expenditure or examining the explanations furnished by the assessee regarding utilisation of such withdrawals. 8. It is further noticed that the assessee had filed detailed written submissions along with supporting documents before the AO as well as before the ld.DRP. However, the impugned orders do not indicate proper consideration of such material. The issue whether sec....