9911796707
TMI Blog2013 (10) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment years 2006-2007 and 2007-2008 respectively, raising the following questions of law: 1. Whether in the impugned assessment year, income can be assessed at 8% rate on the gross contract receipts invoking S.44AD of the Act when the turnover of the assessee had exceeded the Rs.40 lakh limit prescribed in the Act? And whether the Tribunal can uphold such a patently erroneous assessment especially after making a specific finding in the beginning of para 7 of the impugned order that S.44AD of the Act has no application in the instant case as the turnover has exceeded Rs.40 lakhs/ 2. Whether the Tribunal ought to have taken cognizance of the violation of natural justice principles by the AO while making the assessment u/s.143(3) bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer estimated the income from contract business at 8% on the gross contract receipts admitted by the assessee of Rs.4,02,10,611/- and Rs.5,34,96,995/- respectively by invoking the provisions of Section 44 AD of the Income Tax Act, 1961. Apart from this there were other incomes for the assessee and those were assessed as per the regular procedure. It is a matter on record, the assessee was issued with a notice and the assessment was taken to scrutiny and notice under Section 143(2) of the Act was made and ultimately the assessment order was passed under Section 143(3) of the Act. Aggrieved by the assessment made under Section 44AD of the Act, taking the total receipt on Rs.4,02,10,611/- and Rs.5,34,96,995/- respectively on a presumptive basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present appeals have been preferred by the assessee before this Court. 5. Learned Counsel appearing for the assessee pointed out that on the admitted fact, for the assessment year 2006-07, the assessee's turnover exceeded Rs.40 lakhs, as prescribed under Section 44AD of the Act, the Section had no relevance at all for the purpose of taxing the assessee on presumptive basis. In any event, even while restoring the assessment, the assessee had not been put on notice as regards this aspect to proceed under Section 144 of the Act. In the circumstances, the order of the Income Tax Appellate Tribunal restoring the assessment is bad in law. 6. A reading of Section 44 AD of the Income Tax Act, 1961 shows that notwithstanding anything to the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the balance sheet for the assessment years under consideration along with the returns of income. Even the vouchers given by the assessee were found to be defective. It is pointed out in the Appeals filed by the assessee, the Commissioner of Income Tax (Appeals) mainly scaled down such estimate for the reason that in the earlier assessment year 2005-2006, 3.69% of turnover was considered to be appropriate for completing the assessment. The Income Tax Appellate Tribunal held that 8% of the gross receipts would be a justifiable assessment even by way of best of assessment. Thus, the Tribunal restored the order of the Assessing Officer. In so holding, the Tribunal further held that while so fixing the income at 8% of the gross receipts, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had to sacrifice the profit. Thus, taking note of these submissions and other materials on record and since the net profit was shown in the range of 1.26 to 3.69 per cent in the preceding year, assessing the income at high rate of 8% was not called for. In the circumstances, as a via-media the Commissioner of Income Tax (Appeals) fixed it at 5%. 9. Thus in the background of the facts considered by the Commissioner of Income Tax (Appeals) and in the context of the assessee not maintaining any books of accounts or filing profit and loss account and balance sheet, the assessee felt satisfied that the relief granted by the the Commissioner of Income Tax (Appeals) fixing the assessable income at 5% was acceptable to it. Consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
