9911796707
TMI Blog2016 (9) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... of civil engineering consultancy and construction activities. Assessee filed its return of income for AY 2008-09 on 27.9.2008 declaring total loss of Rs. 1,33,970/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) vide order dated 25.8.2010 and the total loss as furnished in the return of income was accepted at Rs.(-)1,33,970/-. Subsequently, Assessing Officer (AO) noticed that though assessee had gross receipts of Rs. 5,54,103/- from construction activities, assessee had declared net loss of Rs. 1,33,970/- As per the provisions of Section 44AD of the I.T.Act,1961, assessee should have declared income atleast at the rate of 8% of the receipts and in case the income is declared at less than 8% of the recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 44AD. The AO has held that since the assessee has declared loss of Rs. 1,33,970/- on total receipts of Rs. 5,41,193/- from the business of Civil construction and has failed to got its account audited u/s.44AB of the Act, assessee's total income is computed @8% of Gross receipts of Rs. 5,41,193/-, which comes to Rs. 43,295/- is taken as taxable income of the appellant. The appellant has stated that as per section 44AD (5), the assessing officer cannot make section 44AD(1) applicable to the assessee, when the assessee declares lower profit. The appellant has further stated that the assessing officer has no power to assess the income u/s 44AD(1) when section 44AD(5) is applicable. Thus section 44AD(1) is not applicable to the assessee. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing provisions of this section, an assessee may claim lower profits and gains than the profits and gains specified in sub section (1), if he keeps and maintains such books of account and other documents as required under sub section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB." The appellant's turnover in the business of civil construction is less than 40 lacs. It is not negated by the appellant that the books of account are not audited u/s.44AB of the I. T. Act. If an assessee claims lower profits and gains than the profits and gains specified in sub section (1), he has to keep and maintain such books of account and other documents as required under sub section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is again the law. 4. It is therefore prayed that:- (i) the additions made by Assessing officer of Rs. 43,295/- be deleted. (ii) the appellant may be allowed to add, amend, alter or raise additional grounds of appeal till finalization of Appeal (iii) the assessment order of the learned Assessing Officer may be set aside and the representation made by the appellant be considered. 3. Before us, ld.AR has challenged the validity of reassessment framed by the AO. Before us, Ld AR reiterated the submissions made before lower authorities and further submitted that in the original order framed u/s 143(3), AO had accepted the loss of Rs. 1,33,970/- and subsequently only on account of change of opinion held that Assessee was required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eve that (b) Income chargeable to tax has escaped the assessment and (c) In cases where the assessment sought to be reopened is beyond the period of some four years from the end of the relevant assessment year, then an additional condition is to be satisfied viz. there must be failure on the part of assessee to fully and truly disclose all the material facts necessary for assessment. In the present case, since initiation of reassessment proceedings is beyond 4 years from the assessment year, therefore unless and until it is observed and found that the income has escaped assessment due to the failure on the part of the assessee to disclose truly and fully all material facts for the assessment, the AO is not authorized to make reassessment. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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