Assessee has no liability to maintain Books of Account when availed the Presumptive Scheme u/s 44AD: ITAT [Read Order]

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessee has no liability to maintain books of account when availed the presumptive scheme under section 44AD of the Income Tax Act,1961.

Sarabjeet Singh, the assessee is a trader &filed his return u/s 139(1) by taking the benefit of the presumptive scheme u/s 44AD of the Act. During the F.Y. 2010-11 related A.Y. 2011-12 the turnover was 15,50,000/- &declared a total income of Rs.1,40,880/-. The notice u/s 148 was issued for depositing the cash in the assessee’s bank account amount of Rs.12,66,500/-.

The AO without considering the contention adjusted the withdrawal from the bank with a deposit of cash, and determined the cash deposit in the bank account amount to Rs. 12,44,880/-. The assessee filed a rectification petition u/s 154 and the demand was rectified and the addition was made Rs.12,44,880/- with the total income of the assessee. On appeal, the CIT(A) upheld the order of the AO. 

Sh.Ghansham Sharma, the counsel of the departmentvehemently argued and relied on the order of the revenue authorities. Further alleged that the assessee was not registered under the State in Direct Tax and no bills and vouchers were produced and the payment was not linked with the party. Sh. Rakesh Joshi, counsel appeared for the assessee challenged the order of the CIT(A).

It was observed that the assessee had availed of the presumptive scheme u/s 44AD during the filing of his return and the assessee has no liability to maintain the books of account as per the provision of the Act.

A Coram of Dr M L Meena, accountant member and Sh. Anikesh Banerjee, a judicial member observed that the assesseehad properly submitted through his counsel that the said amount was paid from his business receipt and held that the benefit should be allowed to the assessee for availing section 44AD for non-maintaining the books of account.

The addition made by the AO amount of Rs.12,44,880/- was quashed by the Tribunal and allowed the appeal of the assessee.

To Read the full text of the Order CLICK HERE

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