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addition u/s 69a & u/s 274 with 270a & 271aac(1)


QUERY: Assessee (Senior Citizen) had filed his ITR showing rental income below taxable limits for AY 2K172K18. In addition to this, he had agricultural income which was not shown in ITR even for rate purpose, as his rental income was below taxable limits. No books of accounts were maintained by the assessee. He was maintaining bank account also and had obtained agricultural crop loan from bank. During demonetization period, he had deposited roughly Rs.12 lakhs cash into bank to square off agricultural loan. He had deposited similar amount in cash in earlier & later years also. Sales of agricultural produce was through cash and cheque. Notice from the A.O. was received u/s 143(2) and 142(1) and replied through e-proceeding portal. Assessment Order u/s 143(3) was issued by the A.O. and he made the addition of the entire amount of Rs. 12 lakhs u/s 69A read with section 115 BBE. He had also assumed the agricultural income of Rs. 6 lakhs on the basis of commission agent statement given to him and allowed Rs. 1.50 lakhs for expenses. He has wrongly assumed a profit of 75% on sale of agricultural products. It was clearly mentioned in the reply that most of the agricultural products are sold in cash directly to buyers, and not through commission agent, and the deposit of Rs. 12 lakhs was through that sales, and out of past savings kept with the assessee, as the Indian Agricultural Economy is mostly on cash basis. The A.O. has computed a demand of Rs. 10 lakhs on cash deposit of Rs. 12 lakhs. He has also issued a notice u/s 274 read with section 270A for under reporting of income, and also another notice u/s 274 read with section 271AAC(1), and also covered under section 115BBE. We are planning to file an appeal to CIT (A). He has also given an opportunity to show cause, why a penalty u/s 270A and 271AAC(1), be not imposed on the assessee. It is hereby earnestly requested to suggest some case laws for non addition of Rs. 12 lakhs u/s 69A, and Rs. 4.50 lakhs under Agricultural Income. Also suggest a suitable reply for Show Cause Notices. Thanks in advance. CA Y K SATIJA / DELHI / 9818722221 / 9873777335. Read more at: https://www.caclubindia.com/experts/experts_display_list_by_category.asp?cat_id=3&mode=open

 
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Proprietor

Pl. supplement your query, with the following:

ITR form used to file ITR of your assessee  for AY 2017-18.

Was this  first assessment of your client.

When you make a move to establish the basis of estimation of agril. income by A.O. not based on sound footing, the different element of actual expenditure needs to be worked out approxly.supported by a reasonable noting.

In case you lay hands on assessment of assessees of your locality having similar income and the ratio adopted by A.O.s in such cases,they can be safely referred to.

Pl. bear in mind that any reply to show cause notice should be ptoperly framed to present our point of defence as this would be the stepping stone for subsequent appeals if required.

 

 
Reply   
 


Proprietor

Pl. supplement your query, with the following:

ITR form used to file ITR of your assessee  for AY 2017-18.

Was this  first assessment of your client.

When you make a move to establish the basis of estimation of agril. income by A.O. not based on sound footing, the different element of actual expenditure needs to be worked out approxly.supported by a reasonable noting.

In case you lay hands on assessment of assessees of your locality having similar income and the ratio adopted by A.O.s in such cases,they can be safely referred to.

Pl. bear in mind that any reply to show cause notice should be properly framed to present our point of defence as this would be the stepping stone for subsequent appeals if required.

 

 
Reply   
 
Proprietor

Pl. supplement your query, with the following:

ITR form used to file ITR of your assessee  for AY 2017-18.

Was this  first assessment of your client.

When you make a move to establish the basis of estimation of agril. income by A.O. not based on sound footing, the different element of actual expenditure needs to be worked out approxly.supported by a reasonable noting.

In case you lay hands on assessment of assessees of your locality having similar income and the ratio adopted by A.O.s in such cases,they can be safely referred to.

Pl. bear in mind that any reply to show cause notice should be properly framed to present our point of defence as this would be the stepping stone for subsequent appeals if required.

 

 
Reply   
 
Proprietor

Pl. supplement your query, with the following:

ITR form used to file ITR of your assessee  for AY 2017-18.

Was this  first assessment of your client.

When you make a move to establish the basis of estimation of agril. income by A.O. not based on sound footing, the different element of actual expenditure needs to be worked out approxly.supported by a reasonable noting.

In case you lay hands on assessment of assessees of your locality having similar income and the ratio adopted by A.O.s in such cases,they can be safely referred to.

Pl. bear in mind that any reply to show cause notice should be properly framed to present our point of defence as this would be the stepping stone for subsequent appeals if required.

 

 
Reply   
 
Proprietor

Pl. supplement your query, with the following:

ITR form used to file ITR of your assessee  for AY 2017-18.

Was this  first assessment of your client.

When you make a move to establish the basis of estimation of agril. income by A.O. not based on sound footing, the different element of actual expenditure needs to be worked out approxly.supported by a reasonable noting.

In case you lay hands on assessment of assessees of your locality having similar income and the ratio adopted by A.O.s in such cases,they can be safely referred to.

Pl. bear in mind that any reply to show cause notice should be properly framed to present our point of defence as this would be the stepping stone for subsequent appeals if required.

 

 
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