Scrap Dealing is a Peculiar Business, Books of Account not Required: ITAT Allows Appeal, Notes Declared Income u/s 44AD [Read Order]
ITAT notes scrap dealers need not maintain books of account. The tribunal notes the history of the assessee-appellant and allows the appeal.
![Scrap Dealing is a Peculiar Business, Books of Account not Required: ITAT Allows Appeal, Notes Declared Income u/s 44AD [Read Order]](https://images.taxscan.in/h-upload/2026/02/24/2126895-scrap-dealing-is-a-peculiar-business-books-of-account-not-required-itat-taxscan.webp "Scrap Dealing is a Peculiar Business, Books of Account not Required: ITAT Allows Appeal, Notes Declared Income u/s 44AD [Read Order]")
The Income Tax Appellate Tribunal (ITAT), Agra Bench, held that books of accounts are not required in peculiar businesses like scrap dealing due to their unpredictable market. The tribunal allowed the appeal filed before it and noted declared income under Section 44AD of the Income Tax Act, 1961. Anand Kumar Jain, the assessee-appellant, filed an appeal against the order...
The Income Tax Appellate Tribunal (ITAT), Agra Bench, held that books of accounts are not required in peculiar businesses like scrap dealing due to their unpredictable market. The tribunal allowed the appeal filed before it and noted declared income under Section 44AD of the Income Tax Act, 1961.
Anand Kumar Jain, the assessee-appellant, filed an appeal against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 23.10.2024 for Assessment Year 2017-18. The facts of the case are that the assessee filed the return on 15.01.2018 declaring total income of INR 3,46,660/- and the case was selected for scrutiny. Notice under 143(2) and 142(1) were served to the assessee, a scrap dealer in trading of copper/brass scrap and electronic/mechanical scrap material under Jain Enterprises. The assessee declared sales of INR 39,62,881/- with a net income of INR 3,53,021/-.
During assessment, it was observed that the assessee made cash deposit. This was after the declaration of demonetization on 08.11.2016. The Assessing Officer (AO) made the addition of INR 39,62,881/- as unexplained cash credit under Section 68. The assessee preferred an appeal before NFAC but CIT/NFAC sustained the addition made by the AO. Following this, the assessee appealed before the ITAT.
The counsel for the assessee submitted that the sales are declared under Section 44AD and that in the business of scrap, sales are not declared specific to any month as there is not fixed pattern.
The tribunal observed that the assessee has been in the scrap business for the last 3 years and has declared income under Section 44AD. ITAT also noted that there is no requirement to maintain any books of account. The tribunal comprising S. Rifaur Rahman (Accountant Member) deleted the additions made by the AO and allowed the grounds raised by the assessee.
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