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2002 (11) TMI 65 - ORISSA HIGH COURTConstitutional validity of section 44AD of the Income-tax Act - The argument that section 44AD of the Act does not apply to sub-contracts and applies only to a contract cannot be accepted. The mere fact that in the matter of deduction at source, a distinction is made in section 194C between a contractor and a sub-contractor, does not enable the assessee to contend that section 44AD cannot apply to the case of a sub-contractor. The section speaks of any assessee engaged in the business of civil construction or supply of labour for civil construction and provides for a presumptive profit from such business. Whether a contractor or a sub-contractor, the assessee is admittedly engaged in the business of civil construction or supply of labour for civil construction within the meaning of section 44AD of the Income-tax Act. On the wording of section 44AD of the Act, there is no doubt that a sub-contractor would also come squarely within the purview of that provision. We are therefore not in a position to accept the argument that a sub-contractor is not covered by section 44AD
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