Krimesh Ramesh Divecha vs. Deputy Commissioner of Income–tax, 34(2) (ITAT Mumbai)

Court: ITAT Mumbai
Head Notes:

The aforesaid appeal has been filed by the assessee against order dated 07/12/2023 passed by NFAC, Delhi for the quantum of assessment passed u/s.143(3) for the A.Y.2015-16.

In the aforesaid case the assessee had declared income from transaction in derivatives (futures) transactions declaring total turnover of Rs.42,61,003/- and offered income u/s.44AD @ 8% during the A.Y.2015-16. The ld. AO noted that there were some 15 page of the system information pertaining to the shares transaction under the assessee’s PAN which works out to Rs.5,24,27,992/- and based on such information on the system, he has applied 8% and worked out the profit of Rs.41,94,239/-.

The ld. Counsel for the assessee submitted that at no point of time the department had shared these details for the alleged share transaction of Rs.5,24,27,992/-. However, Ld. AO without elaborating or confronting the details had made the addition.

Even before the ld. CIT(A) also, these details of alleged transactions have not been verified and ld. CIT(A) has simply held that profit is estimated @ 50% on the total turnover declared by the assessee i.e.42,61,003/- without assigning any reasons.

After considering the aforesaid finding given in the impugned order, first of all, we find that ld. AO has made addition without sharing any information about the alleged transaction available on the system. The ld. CIT(A) on the other hand had accepted the total turnover of Rs.42,61,003/- as disclosed by the assessee, however, without assigning any reason he has estimated profit rate of 50%. If the turnover has been accepted by the ld. CIT(A), then there is no justification of applying such a huge profit rate of 50% and since assessee has opted for presumptive taxation u/s.44AD, then 8% as provided in the statute is liable to be accepted.

In the result, appeal of the assessee is allowed.

Section(s): Section 44AD, Section 68, Section 251(2), Section 44AB
Counsel(s): CA Devang Divecha
Dowload Pdf File Click here to download the file in pdf format
Uploaded By Staff
Date of upload: May 29, 2024

Leave a Reply

Your email address will not be published. Required fields are marked *