MOHD UZAIR,DELHI V. OFFICE OF THE INCOME TAX OFFICER WARD 28 (4), DELHI

ITA 1197/DEL/2024

AI Insights

The case involves Mohd Uzair, the appellant, who filed an appeal against the order of the Commissioner of Income Tax (Appeals) which confirmed an addition of Rs.11,25,140 to his income for the assessment year 2016-17. The addition was initially made by the Assessing Officer as an adhoc disallowance of 20% of expenses claimed by the assessee. The CIT(A) reduced the disallowance but upheld the addition. The Tribunal, however, found that since the assessee had declared his income under the provisions of Section 44AD on a presumptive basis and had offered a higher income than the presumptive rate, the addition made was not justified.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298835 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH TIWARI
• Keywords: Condonation of delay; Set aside
• Section: 44AD; 28

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.1197/िदʟी/2024 (िन.व. 2016-17) ITA No.1197/DEL/2024 (A.Y.2016-17) Mohd Uzair, A-8, Aul Fazal Enclave, Part-1, Shaheen Bagh, Okhla, Delhi 110025 PAN: ABDUP-3223-B ...... अपीलाथᱮ/Appellant बनाम Vs. Commissioner of Income, Civic Centre, Minto Road, New Delhi 110002 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : None ŮितवादीȪारा/Respondent by : Shri Rajesh Tiwari, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 10.12.2024 घोषणा कᳱ ितिथ/ Date of pronouncement : : 31.01.2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against an ex-parte order of Commissioner of Income Tax (Appeals)/Additional/Joint Commissioner of Income Tax(Appeals)-2, Coimbatore (hereinafter referred to as 'the CIT(A)') dated 11.01.2024, for assessment year 2016-17. 2. The appeal is time barred by five days. The assessee has filed a petition for condonation of delay supported by an affidavit. After perusal of the same, I am satisfied that delay in filing of appeal is not intentional, but is for the reasons 2 ITA No. 1197/Del/2024(AY 2016-17) stated in the petition which appears to be bonafide. Hence, delay in filing of appeal is condoned and appeal is admitted for hearing on merits. 2. The assessee in appeal has assailed addition of Rs.11,25,140/- confirmed by the CIT(A) on estimations. 3. The assessee had filed return of income declaring income of Rs.8,23,920/- under provision of section 44AD of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’). The Assessing Officer (AO) inter alia made adhoc disallowance of 20% of expenses resulting in addition of Rs.13,86,720/-. The assessee carried the issue in appeal before the CIT(A). The CIT(A) granted part relief to the assessee by estimating net profit @25% of turnover and restricted the disallowance of expenses to Rs.11,25,140/-. The assessee in appeal before the Tribunal has assailed the aforesaid addition. 4. Shri Rajesh Tiwari, representing the department prayed for upholding impugned order and dismissing appeal of the assessee. He submitted that the assessee has failed to substantiate the expenditure claimed. 5. It is an undisputed fact that the assessee has filed return of income declaring income of Rs.8,23,920/- on presumptive basis under provisions of section 44AD of the Act. The Revenue has not disputed the fact that the assessee is an eligible assessee under provision of section 44AD of the Act. Once, the return of income has been filed under the special provision of section 44AD of the Act, the assessee cannot claim deduction allowable under provisions of section 28 to 43C of the Act. The assessee u/s. 44AD of the Act as against presumptive tax of 8% has offered income to tax @ 9.8%. After accepting the assessee as “eligible 3 ITA No. 1197/Del/2024(AY 2016-17) assessee” u/s. 44AD of the Act the Revenue cannot look into each and every expenditure and make ad-hoc disallowance with regard to the expenditure separately. 6. In light of above findings, addition confirmed by the CIT(A) is directed to be deleted. 7. In the result, impugned order is set aside and appeal of the assessee is allowed. Order pronounced in the open court on Friday the 31st day of January, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 31.01.2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "