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2006 (6) TMI 417 - AT - Income TaxCivil construction business - survey conducted u/s 133A - receipt of "on money" - deemed income assessable under the provisions of section 44AD - income declared more than 8%, AO can increase the percentage of profit u/s 44AD? - HELD THAT:- It is not the case of revenue that the total receipts of the assessee exceeded Rs. 40 lakhs so as to say that the income of assessee is not assessable u/s 44AD of the Act. There is no material on record to show that all the expenditure incurred in respect of civil work were duly claimed by the assessee and the receipt of "on money" was the net income of the assessee particularly when assessee has not maintained the books of account, or they have not been produced or relied upon by the assessee. There is no material with the department to arrive at a conclusion that for receiving "on money" assessee did not incur any expenditure. As pointed out earlier, that the only base for the revenue to assess the "on money" in its entirety, is the statement of partner recorded during the course of search. As per the decision in the case of Paul Mathews & Sons v. CIT [2003 (2) TMI 25 - KERALA HIGH COURT] no evidentiary value can be attached to such statement unless it is supported by some material. In this view of the situation, it can be held that there is no material with the department to make addition of "on money" in its entirety and what is assessable u/s 44AD is 8% of the gross receipt or more profits shown by assessee in its return of income. In the present case assessee has shown income of more than 8% therefore, no addition can be made by Assessing Officer while working u/s 44AD of the Act. Thus, it is held that no addition could be made to the income of assessee and, therefore, addition made is deleted - In the result, appeal filed by the assessee is allowed.
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