S.C : The income of the assessee(s) is less than Rs.40,00,000/- (Rupees forty lakhs only) and, therefore, the proviso to Section 44AD

Supreme Court Of India

Awasthi Traders vs. CIT-I, Agra

Section 44AD, 32 and 44A

Assessment Year 2009-10

Ranjan Gogoi And Prafulla C. Pant, JJ.

Civil Appeal Nos. 8481, 8738 To 8744 Of 2016

August 30, 2016

ORDER

C.A. No…. @ SLP (C) No. 27718/2014

1. Leave granted.

2. Admittedly, the proviso to Section 44AD of the Income Tax Act, 1961, (herein after referred to as ‘the Act’) is applicable to the appellant-assessee in view of the fact that its income for the assessment year in question, i.e. 2009-2010, is above Rs.40,00,000/- (Rupees forty lakhs only). If that is so, the bar to the entitlement for depreciation under Section 44A(2) of the Act will not apply. Grant of depreciation under Section 32 of the Act would, therefore, become mandatory.

3. The above facts have been over looked by the High Court in holding that Section 44AD is applicable to the case of the appellant-assessee. We, therefore, set aside the order of the High Court as well as the order of the assessment and direct that necessary steps be taken in accordance with law so far as the assessment year 2009-2010 is concerned.

4. The appeal is disposed of in the above terms.

C.A. Nos…. @ SLP(C)…CC No. 10169/2014, SLP(C) Nos. 14325/2014, 15210/2014, 15352/2014, 15447/2014, 2720/2016 and 22533/2014

5. Delay condoned.

6. Leave granted.

7. The order passed in Civil Appeal arising out of SLP(C) No.27718 of 2014 shall govern these cases also. However, if on verification, it is found that the income of the assessee(s) is less than Rs.40,00,000/- (Rupees forty lakhs only) and, therefore, the proviso to Section 44AD of the Income Tax Act, 1961 has application implication, the respondents may seek modification of this order.

8. The appeals are disposed of accordingly.

[Citation : 388 ITR 185]