2010 (9) TMI 896 - AT - Income Tax

Summary

Issues involved: Appeal challenging order of CIT(A) u/s 44AD of the Act regarding net profit rate and work-in-progress.

Summary:
The appeal was filed by the assessee challenging the order of the CIT(A) on the grounds that the case is covered u/s 44AD of the Act as receipts are less than Rs. 40,00,000 and profit is more than 8%. The assessee, a contractor, declared a net profit rate of 8.15% which was contested by the Assessing Officer at 12.5%, later reduced to 9% by CIT(A). The Tribunal found that the case falls under section 44AD, and the net profit rate of 8.15% declared by the assessee is justified. The Assessing Officer was directed to apply this rate on gross receipts, and no separate addition for work-in-progress was warranted as it is part of the business. Consequently, the appeal of the assessee was allowed, and the net profit rate of 8.15% was upheld.

In conclusion, the appeal of the assessee was disposed of in favor of the assessee, with the net profit rate of 8.15% being applied on gross receipts as per section 44AD of the Act.