TMI Blog2016 (4) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. Therefore, the assessee cannot dictate the method or way claiming best judgment assessment. The assessee's plea that he being in the business of civil construction, Section 44AD should be applied to him is baseless inasmuch as the law itself provides that provision will not be applicable to assessee having receipt above ₹ 40 lacs. The assessee's case is within the purview of Section 44AD of the Act by operation of law itself. The assessee's deliberate act of maintaining audited books of account and deliberately not producing expenditure vouchers cannot be taken lightly. No explanation has been offered by the assessee as to why expenditure vouchers could not be produced by him. Thus the act of defiance demonstrate reckless att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law of the case the ld. CIT(A) has erred in observing that assessee is not carrying on the business of civil construction, being as per I.T. Act civil construction u/s 44AD includes:- (a) the construction or repair of any building, bridge, dam or other structure or any canal or road. (b) the execution of any work contracts The ld. CIT(A) has further erred in sustaining addition when he has not upheld rejection of books of account u/s 145(3) of the I.T. Act made by the AO observing that neither total receipts nor any other expenses have been shown to be incorrect by the AO. 3. On the facts and in the circumstances of the case the ld. CIT(A) has erred in sustaining following disallowance made by the AO (i) in disallowing out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first appeal before the ld. CIT(A) wherein it was contended that when the books of accounts are rejected then only gross profit should have been estimated and disallowance of expenditure was unjustified besides merits of the disallowance was challenged. The ld. CIT (A) after considering the reply and material available on record upheld the rejection of books of accounts. The assessee's plea that in case of rejection of books of account only gross profit should be estimated and being a civil contractor, provisions of Section 44AD should be applied. The ld. CIT(A) rejected the assessee's both pleas holding that on rejection of books AO has power to disallow expenses and assessee's receipts being more than ₹ 40 lacs it was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pager 176 (vii) M/s. Vijay Builders Jaipur (TW Vol.III Part 3 page 93) (viii) Jaswant Singh Contractor vs. ITO (ITA No. 1109/Chd/2011 ITAT Chandigarh) (ix) Reliance Surface Coatings 7 ITR (Trib.) 183 (Ahd.) (x) CIT vs. Gotan Lime Khanij Udyog 256 ITR 243 (Raj.) 2.4 The ld. DR on the other hand vehemently contends that none of the assessee's plea deserves any creditability inasmuch as :- (i) The assessee on one hand claims to be maintaining detailed books of account and supporting vouchers of expenditure and when called on it did not produce expenditure vouchers. There is no qualification by auditors that vouchers are not maintained by it, besides assessee has not given any reason as to why the expenditure vouchers o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 lacs. Since the assessee by statutory provision is bared from the applicability of Section 44AD, there is no justification on the part of the assessee that he should be assessed u/s 44AD by operation of law which is not applicable on him. (v) The ld. CIT(A) has accorded substantial relief by reducing the disallowance and contract expenses to the extent of 1/3rd of the expenses. Thus the order of the ld. CIT(A) is very reasonable based on material facts available on record. 2.5 I have heard the rival contentions and perused the materials available on record. I find merit in the contentions of the ld. DR. The assessee's plea that books of account should not have been rejected u/s 145(3) which is devoid of any merit as nowhere it h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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