TMI Blog2004 (7) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeds Rs. 40 lakhs. ii. Deleting the addition of Rs. 44,12,495 by applying 8% on gross contractual receipts as a result of which additions stand reduced to Rs. 7,32,281". 2. The brief facts of the case as they emerge from the order of the Assessing Officer are that the assessee is an interior decorator who has declared an income of Rs. 8,80,300 against gross contractual receipts amounting to Rs. 1,97,58,476 the assessee debited job work charges amounting to Rs. 92,55,404 to the Profit and Loss Account. The Assessing Officer noted that most of the job work payments have been made in cash. He required the assessee to submit details of parties to whom job charges exceeding Rs. 50,000 were paid. After examining the list the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... civil construction as the Assessing Officer has calculated the taxable income at Rs. 53,10,028 and net profit rate comes out to be more than 27%. The ld. CIT(A) agreed to the submissions of the assessee and applied the provisions of section 44AD and net profit of 8% was applied on gross receipts. While applying the provisions of section 44AD she had relied on a decision of ITAT in the case of Eastern Construction Co. v. ITO [1997] 59 TTJ (Delhi) 723 . By applying 8% net profit rate of cross contractual receipts of Rs. 1,97,58,476 taxable income from the interior decoration work comes to Rs. 15,80,678 as per the order of the ld. CIT(A). 4. Aggrieved by this order of the ld. CIT(A) the deptt. is in appeal before us. 5. At the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation to section 44AD reads as under : "44AD : Explanation. For the purpose of this section, the expression civil construction includes ( a )the construction or repair of any building, bridge, dam or other structure or of any canal or road; ( b )the execution of any works contract". The plain reading of this makes it clear that the assessee being engaged in the business of interior decoration does not come under the business of civil construction. Therefore, we have no hesitation in holding that the ld. CIT(A) was wrong in applying the provision of section 44AD in the case of the assessee. Therefore, the order of the CIT(A) is set aside and that of Assessing Officer is restored back. 7. In the result, the appeal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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