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TMI Blog2016 (7) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... d to as - the Tribunal) in MA No. 54/CHD/2015 in ITA No. 188/CHD/2014 was handed over to us by learned counsel appearing on behalf of the appellant in Court today. The same is ordered to be taken on record as Mark-A. The present is an appeal by the Revenue under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as - the Act) impugning therein the order passed by the Tribunal dated 15.07.2014 (Annexure A-3). At the time of hearing of the matter, the afore-referred order dated 15.12.2015 (Mark-A) was produced and also assailed. The present appeal pertains to the assessment year 2010-11 and seeks to raise the following substantial questions of law :- "1. Whether in the facts and circumstances of the case, the ITAT was right i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken up by the assessee in appeal before the Commissioner of Income Tax (Appeals), Patiala (hereinafter referred to as - the Commissioner) who ordered substitution of the Net Profit Rate @ 6.5% in place of 10%. The other relief granted to the assessee was with regard to the claim of depreciation. The Revenue challenged the order of the Commissioner by preferring an appeal against the same before the Tribunal, in which Net Profit Rate was ordered to be applied @ 7% instead of 6.5%, as applied by the Commissioner. The issue with regard to the claim of depreciation was not opined upon and for a decision on this issue, an application was filed by the Revenue, which, through order dated 15.12.2015 (Mark-A), was rejected. It is in the backg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eem it appropriate to refer to the provisions of Section 44AD (1) and (2) of the Act, as it existed at the time of the assessment year in question and the same is as under :- "44AD. Special provision for computing profits and gains of business of civil construction, etc. - (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee engaged in the business of civil construction or supply of labour for civil construction, a sum equal to eight per cent of the gross receipts paid or payable to the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum as declared by the assessee in his return of income, shall be deemed to be the profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t exceed Rs. 40 lakhs. Gross receipts are the amount received from the clients for the contract and will not include the value of material supplied by the client. The income from the above mentioned business will be estimated at 8 per cent of the 6 of 11 ::: Downloaded on - 21-07-2016 16:06:00 ::: I. T. A. No. 30 of 2016 (O&M) 7 gross receipts paid or payable to an assessee. A taxpayer can voluntarily declare a higher income in his return." From a harmonious reading of the afore-quoted provision of the Act and the circular, it is abundantly clear that the provisions of Section 44 AD of the Act were not applicable upon an assessee, whose gross receipts were exceeding Rs. 40 lacs. On a query posed by us, it was admitted by the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , wherein it has been held as under :- "6. Section 44 AD (2) of the Income Tax Act, if read in isolation of a circular issued by the Central Board of Direct Taxes would, require us to answer this question, in favour of the revenue. A perusal of the circular, however reveals that it is clarified, that Section 44 AD (2) of the Act applies to assessees whose gross receipts do not exceed Rs. 40 lacs. The assessee's gross receipts, as, referred to in the assessment order, admittedly exceeded Rs. 10 crores. A relevant extract from the circular issued by the Central Board of Direct Taxes is as follows :- "The Estimated Income Method of assessment for certain categories of businesses is prevalent in several countries. The Tax Reforms Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequently the questions of laws are answered against the revenue and the appeal is dismissed. [Emphasis supplied]" In support of his submissions, learned counsel for the appellant pressed into service the following two Division Bench judgments of this Court :- 1. Commissioner of Income Tax vs. Chopra Bros. India (P) Ltd. - [2001] 119 Taxman 866 (Punjab and Haryana) and 2. Surinder Pal Nayyar vs. Commissioner of Income-tax, Ludhiana - [2009] 177 Taxman 207 (Punjab and Haryana). We have gone through both the afore-referred judgments and find that neither of the judgments would apply to the facts of the case in hand. So far as the case of Chopra Bros. (supra) is concerned, in that case, the Division Bench held that the provisions of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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