TMI Blog2012 (7) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed the profits more than 8% of the gross receipts and there is no dispute in receipt of the gross receipts the addition made u/s 40(a)(ia) is not sustainable - decided in favour of assessee. - ITA No.602/Kol/2011 - - - Dated:- 11-5-2012 - Mahavir Singh, C D Rao, JJ. For Appellant: Shri Amitabha Roy For Respondent: Shri S Chakraborty ORDER Per: C D Rao: The above two appeals one filed by the Revenue and the Cross Objection filed by the assessee are against order dated 04.08.2010 of the CIT(A)-XIV, Kolkata pertaining to A.Yr. 2007-08. 2. The only issue raised by the revenue is relating to deletion of addition of Rs.32,62,140/- made by AO u/s 40(a)(ia) of the IT Act. 3. The brief facts of this issue are that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... picture. It is not acceptable that the firm does not maintain any books of accounts when the A/r had famished lots of information at. the time of filing return as well as at the time of scrutiny proceedings. Ii. is only to avoid the liability of deducting lax at source that the aspect of section 44AD has been brought into picture. So, keeping in view the discussion above and the facts and circumstances of the case, the contention of the A/r is not tenable, hence rejected. Now, let us come to the findings in the case. The assessee firm had made certain payments to the following parties during the entire financial year against which tax was required to be deducted at source: Name Amount Nature of Business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for financial year 2006-07 on the receipt side following two entries are made. By, bill collection for job contract 19,71,112.00 By, stock/work-in-progress 65,45,500.00 Thus the assessee is engaged in the business of civil construction as mentioned in section 44AD. Now the important question is whether the gross receipt paid or payable to the assssee in the previous year on account of such business is Rs.40,00,000/- or less or not. It is seen that the work-in-progress of Rs. 65,45,500/- has been shown by the assessee for the residential flats which are being constructed by it but which were not complete by the end of the previous year under consideration. The assessee has claimed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed by it. The opening lines of section 44AD state as follows: Notwithstanding anything to the contrary contained in sections 28 to 43C, in the This means that while calculating 8% of the gross receipt of the assessee all the deductions to be allowed or disallowed as provided in section 28 to section 43C are considered to have been taken into consideration. If the assessee has shown more than this 8% in its return then that higher value is to be adopted. In the facts of the above case the 8% of gross receipts comes to Rs. 1,57,689/- and the profit declared by the assessee is Rs. 1,64,814/-. Therefore, the profit of Rs. 1,64,814/- declared by the assessee is to be adopted u/s 44AD and there will not be any scope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A)and further pointed out point-wise replies to the queries and observations made by AO which were incorporated by CIT(A) at pages 6,7 and 8 and finally concluded that since assessee is covered by the provision of section 44AD of the Act the law does not require to maintain books of accounts u/s 44AA of the Act and audit its accounts u/s 44AB of the Act. However, if the assessee has done so it cannot be held against the assessee. Similarly, if the assessee has mentioned certain details about his financial transactions in the return of income on the basis of the books of accounts which cannot be used as an evidence against the assessee. Therefore he requested to upheld the action of ld. CIT(A). 6. After hearing the rival submissions and on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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