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AO not having rejected books of accounts could not make any estimated additions or resort to section 44AD.

By Jagdish T Punjabi, Chartered Accountant
Devendra Jain, Advocate
Reading Time 3 mins

36 Bulu Ghosh vs. ITO

2023 Taxscan (ITAT) 2508 (Kol - Trib.)

ITA No.: 729/Kol./2023

A.Y.: 2016-17

Date of Order: 18th October, 2023

Sections: 44AD, 145A

AO not having rejected books of accounts could not make any estimated additions or resort to section 44AD.

FACTS

The assessee filed a return of income for the A.Y. 2016-17 which was duly processed u/s 143(1) of the Act. In the course of proceedings for scrutiny assessment, the assessee furnished the necessary details asked for, by providing a copy of the audit report along with P & L A/c and balance sheet for the year ended 31st March, 2016. The Assessing Officer (AO) examined the documents which were produced before him during the assessment proceeding and found that the assessee had reflected a net loss of ₹13,80,362 from contractual business, whereas, as per 26AS, the total value of contract works is ₹22,13,069. On this issue, the AO asked the assessee to explain the discrepancy. However, the assessee could not furnish any documentary evidence to reconcile

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FROM THE PRESIDENT

A bank can receive Form No. 15G and need not deduct tax at source only in the cases, where the declaration is given that the tax liability on total income including the interest income will be Nil provided the interest income does not exceed the basic exemption limit. But where the interest income exceeds the basic exemption limit, the bank needs to deduct tax at source notwithstanding the furnishing of declaration in Form No. 15G and the bank will be treated as assessee in default u/s 201(1), where not only it failed to deduct tax at source but the customer also failed to pay such tax directly.