Santi Ranjan Biswas , New Delhi V. ITO, Ward- 31(3), New Delhi

ITA 3745/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3551 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 18-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Presumptive income; Business income; TDS
• Section: 44AD; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 3745/DEL/2018 : ASSTT. YEAR : 2014-15 SANTI RANJAN BISWAS, C/O DEV RAJ SHARMA, ADV. TA-327, 2 ND FLOOR, TUGHLAKABAD EXTN., MAIN OKHLA ROAD, NEW DELHI-110019 VS INCOME TAX OFFICER, WARD-31(3), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A RE PB3558M ASSESSEE BY : NONE REVENUE BY : SH. UMESH TAKYAR, SR. DR DATE OF HEAR ING: 12 . 10 .20 2 1 DATE OF PRONOUNCEMENT: 14 .10 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-11, NEW DELHI DATED 16. 03.2018. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE ORDER PASSED BY THE LD. CIT(A) IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 2. THAT ON THE FACTS IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD. CIT(A) ERRED IN DITTOING THE ORDER O THE A.O. AND CONFIRMING THE ADDITION OF RS.98,25,752/- AS UNEXPLAINED DIFFERENCE WHICH IS COMPLETELY ARBITRAR Y, UNJUSTIFIED AND ILLEGAL. ITA NO. 3745/DEL/2018 SANTI RANJAN BISWAS 2 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) AND LD. INCOME TAX OFFICER ERRED IN NOT APPRECIATING THE BUSINESS MODU LE OF THE ASSESSEE. THE LD. CIT(A) FAILED TO APPRECIAT E THAT TOTAL BUSINESS RECEIPTS CANNOT BE REGARDED AS INCOME OF THE ASSESSEE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT AFFORD ING REASONABLE OPPORTUNITY TO THE APPELLANT TO PRESENT HIS CASE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT ALLOWI NG THE CREDIT OF THE TDS OF RS.2,21,145/-. 6. THAT APPELLATE ORDER PASSED BY THE LD. CIT(A) AN D THE ASSESSMENT ORDER PASSED BY THE LD. INCOME TAX OFFICER ARE BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 3. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. 4. THE FACT EMERGES AS UNDER: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANPOWER /SECURITY GUARDS SUPPLY AND EARNS PROFIT OUT OF THE RECEIPTS AFTER PAYING WAGES TO THE SECURITY GUARDS PROVIDED BY HIM TO THE CUSTOMERS. DURING THE YEAR, THE ASSESSEE RECEIVED RS.1,16,75,7 52/- ON ACCOUNT OF SERVICES RENDERED TO HIS CUSTOMERS. THE ASSESSEE HAS SHOWN THE NET RECEIPTS OF RS.18,50,000/- AS GROSS P ROFIT AND DECLARED A TOTAL LOSS OF RS.12,385/- IN THE RETURN OF INCOME. THE ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS.98,25, 752/- BEING THE DIFFERENCE OF THE TOTAL RECEIPTS (RS.1,16,75,75 2/- ) AS PER THE AS-26 AND THE NET RECEIPT SHOWN (RS.18,50,000/- ) ON THE GROUNDS THAT THE TAX CREDIT CLAIMED IN THE ITR IS L ESS THAN THE RECEIPT SHOWN AS PER THE AS-26. WE FIND THAT REVENU E HAD TO ITA NO. 3745/DEL/2018 SANTI RANJAN BISWAS 3 ADD THIS AMOUNT OF RS.98,25,752/- OWING TO ABSENCE OF REPRESENTATION BEFORE THE REVENUE AUTHORITIES. THE LD. DR ALSO SUBMITTED THAT THE RECEIPTS BEING MORE THAN RS.1 CR ORE NEEDS TO BE AUDITED AS PER THE PROVISIONS OF SECTION 44AB OF THE INCOME TAX ACT, 1961. WE HOLD THAT THE PROVISION OF VIOLATION OF SECTION 44AB NEEDS TO BE DEALT SEPARATELY AS PER TH E PROVISIONS OF THE INCOME TAX ACT. THE LD. AR SUBMITTED THAT NOTWITHSTANDING ANYTHING, THE ASSESSEE MAY BE TAXED AT THE PRESUMPTIVE RATE OF 8% ON THE GROSS RECEIPTS. WE HA VE GONE THROUGH THE PROVISIONS OF THE ACT. IN CASE OF A PER SON ENGAGED IN A BUSINESS AND OPTING FOR THE PRESUMPTIVE TAXATI ON SCHEME OF SECTION 44AD, THE PROVISIONS OF SECTION 44AA RELATI NG TO MAINTENANCE OF BOOKS OF ACCOUNT WILL NOT APPLY. IN OTHER WORDS, IF A PERSON ADOPTS THE PROVISIONS OF SECTION 44AD A ND DECLARES INCOME @ 8% OF THE TURNOVER, THEN THE ASSESSEE IS N OT REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNT AS PROVIDED FOR UN DER SECTION 44AA IN RESPECT OF BUSINESS COVERED UNDER THE PRESU MPTIVE TAXATION SCHEME OF SECTION 44AD. PAYMENT OF ADVANCE TAX IN RESPECT OF INCOME FROM BUSINESS IS ALSO COVERED UND ER SECTION 44AD. IT MANDATES THAT ANY PERSON OPTING FOR THE PR ESUMPTIVE TAXATION SCHEME UNDER SECTION 44AD IS LIABLE TO PAY WHOLE AMOUNT OF ADVANCE TAX ON OR BEFORE 15THMARCH OF THE PREVIOUS YEAR. IF HE FAILS TO PAY THE ADVANCE TAX BY 15TH MA RCH OF PREVIOUS YEAR, HE SHALL BE LIABLE TO PAY INTEREST A S PER SECTION 234C. PROVISIONS TO BE APPLIED IF A PERSON DOES NOT OPT FOR THE PRESUMPTIVE TAXATION SCHEME OF SECTION 44AD AND DEC LARES INCOME AT A LOWER RATE, I.E., AT LESS THAN 8%. A PE RSON CAN DECLARE INCOME AT LOWER RATE THAN 8% HOWEVER, IF HE /SHE DOES SO, AND HIS/HER INCOME EXCEEDS THE MAXIMUM AMOUNT W HICH IS NOT CHARGEABLE TO TAX, THEN HE/SHE IS REQUIRED TO M AINTAIN THE ITA NO. 3745/DEL/2018 SANTI RANJAN BISWAS 4 BOOKS OF ACCOUNT AS PER THE PROVISIONS OF SECTION 4 4AA AND HAS TO GET HIS ACCOUNTS AUDITED AS PER SECTION 44AB. 5. SINCE, IN THE INSTANT CASE, THE ASSESSEE STRAIGH TLY DOESNT FALL INTO THE SCHEME OF THINGS AS HE DEFAULTED ON PAYMENT OF ADVANCE TAX AND DISCLOSURE OF THE PROFITS @ 8% ON T HE GROSS RECEIPTS AND FILING OF THE SAME IN THE RETURN OF IN COME. AT THE SAME TIME, THE FACTS OF THE CASE THAT THE ASSESSEE IS A SMALL TAXPAYER ENGAGED IN THE SUPPLY OF SECURITY GUARDS A ND EARNS HIS INCOME OUT OF THE MARGIN AFTER PAYING OF WAGES AND SALARY TO THE SECURITY GUARDS HE HIRES FOR HIS CUSTOMERS. HEN CE, KEEPING IN VIEW THE ENTIRE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN THE PECULIARITIES OF THE INSTANT CASE, WE FEEL ENDS OF JUSTICE WOULD BE MET BY DIRECTING THE ASSESSEE TO PAY TAX @ 10%. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2021. SD/- SD/- (SUCHITRA KAMBLE) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 14/10/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR