Mr J P C Solutions, Bangalore V. Income Tax Officer, Ward- 7(2)(1), Bangalore

ITA 1657/BANG/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6892 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-01-2021
• Assessment Year: 2017-2018
• Appeal Filed On: 17-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Presumptive income; FORM 26AS
• Section: 44AD; 154

Judgement Text

ITA NO.1657/BANG/2019 PAGE 7 OF 9 HOWEVER TECHNICAL CONSULTANCY REFERRED IN SECTION 44AA(1) REFERS TO ANY ADVISE, CONSULTANCY, OR SCIENTIFIC OR TECHNICAL ASSISTANCE, RENDERED IN ANY MANNER, EITHER DIRECTLY OR INDIRECTLY, BY A SCIENTIST OR TECHNOCRAT, OR ANY SCIENCE OR TECHNOLOGY INSTITUTION OR ORGANIZATION IN ONE OR MORE DISCIPLINE OF SCIENCE OR TECHNOLOGY. HENCE THE ASSESSEE WAS CORRECT IN OFFERING TAX ON PRESUMPTIVE BASIS UNDER SECTION 44AD OF THE INCOME TAX ACT. IT WAS SUBMITTED THAT THERE WAS AN APPARENT ERROR IN THE INTIMATION U/S.143(1) ORDER OF THE CPC. 12. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A) AND CBDT CIRCULAR 10/2017 DATED 15.11.2017. 13. I HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. THE DISPUTED ADJUSTMENT TO THE TOTAL INCOME DECLARED BY THE ASSESSEE HAS BEEN DONE BY THE CPC IN EXERCISE OF POWERS UNDER SECTION 143(1)(A)(VI) OF THE ACT. IT IS NOT IN DISPUTE BEFORE US THAT RECEIPTS OF RS.38,37,250/- WAS OFFERED TO TAX IN THE RETURN OF INCOME. IN THE INTIMATION UNDER SECTION 143(1)(A) OF THE ACT, ISSUED BY THE CPC, THE CPC HAS PROCEEDED ON THE BASIS THAT THE SUM OF RS.32,62,250/- OFFERED UNDER SECTION 44AD OF THE ACT OUGHT TO HAVE BEEN OFFERED TO TAX UNDER SECTION 44ADA OF THE ACT. ACCORDINGLY, THE SUM OFFERED TO TAX UNDER SECTION 44ADA OF THE ACT WAS TAXED UNDER SECTION 44ADA OF THE ACT. AS WE HAVE ALREADY SEEN THE PRESUMPTIVE INCOME UNDER SECTION 44AD IS ONLY 8% OF THE GROSS RECEIPTS, WHEREAS UNDER SECTION 44ADA, 50% OF THE GROSS RECEIPTS IS THE PRESUMPTIVE INCOME. IT IS THUS CLEAR THAT THE AO HAS NOT FOUND INCOME APPEARING IN FORM 26AS NOT HAVING BEEN INCLUDED IN COMPUTING THE TOTAL INCOME DECLARED IN THE RETURN OF INCOME FIELD BY THE ASSESSEE. THE ADJUSTMENT UNDER SECTION 143(1)(A)(VI) OF THE ACT CAN BE RESORTED TO ONLY WHEN THE SUM OF RS.32,62,650/- IS NOT INCLUDED IN COMPUTING THE TOTAL INCOME DECLARED IN THE RETURN OF INCOME. THE CBDTS INSTRUCTION NO.10/2017 DATED 15.11.2017 HAS CLEARLY LAID DOWN THAT ONLY WHEN RECEIPTS ARE COMPLETELY OMITTED TO BE DECLARED ITA NO.1657/BANG/2019 PAGE 8 OF 9 IN THE RETURN OF INCOME CAN THERE BE AN ADDITION FOR INVOKING 143(1)(A)(VI) OF THE ACT. THE SUBMISSIONS MADE BY THE ASSESSEE IN THIS REGARD HAVE NOT BEEN CONSIDERED BY THE CIT(A) IN THE IMPUGNED ORDER. THE ADDITION THAT THE INCOME APPEARING IN FORM 26AS NOT HAVING BEEN INCLUDED IN THE RETURN OF INCOME FILED IS SINE QUA NON FOR INVOKING THE PROVISIONS OF SECTION 143(1)(A)(VI) SINCE THE SAME IS ABSENT IN THE PRESENT CASE. WE ARE OF THE VIEW THAT THE CPC OUGHT NOT TO HAVE MADE THE IMPUGNED ADJUSTMENT. THE ADDITION OUGHT TO HAVE BEEN DELETED ON THIS BASIS ALONE AND THE APPLICATION UNDER SECTION 154 OF THE ACT OUGHT TO HAVE BEEN ALLOWED. THE ISSUE WHETHER INCOME EARNED BY THE ASSESSEE HAS TO BE TAXED U/S.44AD OR SEC.44ADA OF THE ACT CANNOT BE SUBJECT MATTER OF DECISION IN PROCESSING U/S.143(1) (A) OF THE ACT. IN VIEW OF THE ABOVE CONCLUSIONS, WE ARE NOT GOING TO THE QUESTION WHETHER THE INCOME OF THE ASSESSEE IS ASSESSABLE UNDER SECTION 44ADA OR 44AD OF THE ACT. THE ISSUE IS LEFT OPEN WITHOUT ANY DECISION. 14. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD / - SD/ - (B. R. BASKARAN) ACCOUNTANT MEMBER (N. V. VASUDEVAN) VICE PRESIDENT BANGALORE. DATED: 29 TH JANUARY, 2021. /NS/* ITA NO.1657/BANG/2019 PAGE 9 OF 9 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.