REENA BHATIA, LUDHIANA,PUNJAB V. JAO THE INCOME TAX OFFICER WARD 7(1) LDH, PUNJAB

ITA 339/CHANDI/2025

AI Insights

The case involves Ms. Reena Bhatia, who appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, which confirmed the assessment made by the Assessing Officer. The assessment included additions to the income on the grounds of unexplained business turnover and income from other sources. Ms. Bhatia, engaged in trading of shares and derivatives and manufacturing of engineering goods, contested these additions, supported by her VAT/GST returns and bank credits. The Tribunal examined the evidences and the provisions of Section 44AD, which allows presumptive taxation for small businesses without the need for detailed accounts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714248 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: SUDHIR SEH GAL LD
• Keywords: Business income; Corroborative evidences; Presumptive income
• Section: 143(3); 44AD

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.339/CHANDI/2025 (िनधाŊरणवषŊ / Assessment Year: 2018-19) Ms. Reena Bhatia 64-C, Civil Lines Udham Singh Nagar Ludhiana-141001 बनाम/ Vs. ITO Ward-7(1) Ludhiana. 141001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ABFPB-7700-G (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. Sudhir Sehgal (Advocate) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 17-07-2025 घोषणाकीतारीख /Date of Pronouncement : 04-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 10-01-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 03-06-2021. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. Printed from counselvise.com 2 2. The assessee derived income from trading of shares and derivatives. She also carried out manufacturing of engineering goods under proprietorship concern by the name M/s Shubham Engineers. The assessee prepared combined financial statements. On sale of shares / derivatives, the assessee arrived at business profit of Rs.4.01 Lacs whereas the assessee also credited business income u/s 44AD @6% on turnover of Rs.34.75 Lacs and declared income of Rs.2.08 Lacs which was credited in its Profit & Loss Account. The return of income as filed by the assessee for Rs.4.58 Lacs was subjected to scrutiny. 3. In support of business turnover, the assessee furnished copies of VAT / GST returns. Since sale in July was shown as Nil, Ld. AO doubted the genuineness of the business. In the result, the sale figures for April to June, 2017 for Rs.17.15 Lacs were held to be unexplained money u/s 69A whereas the sales for subsequent months for Rs.17.59 Lacs were held to be income from other sources. Finally, the assessment was completed at Rs.39.34 Lacs. The Ld. CIT(A) confirmed the assessment on the ground that the assessee did not furnish party-wise sales breakup and vendors details. Aggrieved, the assessee is in further appeal before us. 4. From the facts, it emerges that the assessee has declared presumptive profit of 6% on bank credits which would show that the sales turnover have happened through banking channels. The sales turnover is evidenced by VAT / GST returns. In terms of provisions of Sec.44AD, the assessee is not required to maintain regular books of Printed from counselvise.com 3 accounts and accordingly, not required to furnish these details to lower authorities. Similar business income is reflected by the assessee in AY 2017-18 which have been accepted by Ld. AO in scrutiny assessment u/s 143(3) vide order dated 20-12-2019. The conclusion that the business is not genuine is on mere presumptions only without there being any supporting evidence on record. Therefore, impugned addition of Rs.34.75 Lacs is unsustainable on facts. The presumptive income as declared by the assessee u/s 44AD is to be accepted. We order so. 5. The appeal stand allowed. Order pronounced on 04-08-2025. Sd/- Sd/- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 04-08-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "