Answer this question its Urgent.


Q. Whether in an assessment to which presumptive taxation u/s 44AD of Income Tax Act Applies, can AO make addition to income on the basis of admissions made by Assessee in Survey proceedings?

Please Reply.
 

Replies (7)

I think yes.

Please elaborate your answer with Case laws.

there is no provision that ao can't add income which is taxed on presumptive basis.

therefore income which is found in survey can be added.

fine then where is the provision that AO can add income.

in the section 44AD itself it is made clear that it include all the allowances and disallowances as per the act and no other addtional deductions can be made or added.  as per the provision if the no books of accounts are maintined then income can be considered only 5% of gross turnover (subject the turnover does not exceed 40laksh) and if the books of accounts are mainteined 5% or if as per books more than 5% it will be considered.  in the given case as, i am of the opnion that the books have been found or any discurbecnying material is found by AO.  if the AO can prove from such records that the profit is more than 5% then only he can added to income else he cannot do so on presumtive basis.  in the mean time i will give you supporting case laws.  for the time being i suggest you to vist taxmann.net for further case laws,.  in case you want further infomration you can contact me at styleraccessories @ rediffmail.com or ashish17 @ in.com

i think the answer yes, AO can do it

Presumptive taxation prescribes a fixed rate of tax on gross receipts. So, neither AO can add additional income to it nor the assessee can claim any deduction u/s 44AD.

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