The ITAT Agra held that Section 44AD could not apply where turnover exceeded the limit, adopting past profit history instead, allowing telescoping and deleting Section 43B addition.
ITAT Agra's Interpretation of Section 44AD Limits
The ITAT Agra has ruled that the provisions of Section 44AD do not apply to taxpayers whose turnover exceeds the specified limits. In this case, the tribunal opted to adopt the past profit history of the appellant for the assessment purposes, which provided an alternative basis for the computation of income.
The tribunal also allowed telescoping against an identified income for the computation period in question, rejecting the Revenue's addition under Section 43B. This decision underscores the importance of adhering to statutory turnover limits when applying presumptive taxation provisions under the Income Tax Act.
Practitioners should take note of this ruling as it highlights both the limitations of Section 44AD and the principle of basing profit assessments on established historical performance, rather than arbitrary addition by the Revenue.
Citations
- ITAT Agra (2026) TaxGuru 05
