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TMI Blog2014 (12) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... ,49,773/-. He rejected reliance on Clause g to Rule 6DD of Income Tax Rules, 1962 ('Rules' for short) to the effect that payments were made to villagers who were operating tractors, trolleys, bullock carts and had supplied materials like bitumen, grit etc. It was the contention of the assesse that the development work undertaken was in rural or sub rural area and the villagers to whom payments were made did not have benefit of banking facility. The Assessing Officer in addition made adhoc disallowance of 20% on depreciation, car running and maintenance expenditure, telephone expenses, staff welfare expenses etc. The Assessing Officer observed that the assessee had not produced the books of accounts on the plea that books had been stolen. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned in Section 44AD of the Act. He observed that Section 44AD was not applicable as the turnover of the assessee was more than Rs. 40 lacs but the presumptive net profit rate of 8% as stipulated could be taken for estimation. It would be reasonable to estimate the income by applying 8% net profit rate on turnover of Rs. 18,43,03,935/-. He accordingly computed income of the respondent assessee at Rs. 1,46744,314/-, thus making an addition of Rs. 1,13,22,344/- to the declared income of Rs. 34,21,970/-. 5. Aggrieved, the Revenue preferred an appeal before the Tribunal, primarily raising the ground that Section 44AD was not applicable as the assessee's turnover was in excess of Rs. 40 lacs and the Assessing Officer was justified in making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk done by the assessee was undisputed as the assessee had only worked for the Greater Noida Authority. 6. Learned counsel for the Revenue submits that Section 44AD has no application as the turnover of the respondent assessee was Rs. 18.43 crores and the said section prescribes a thumb rule or presumptive net profit rate if the turnover of an assessee is less than Rs. 40 lacs. This is correct and has been noticed by the Commissioner of Income Tax (Appeals) and the Tribunal. The difficulty in the present case is that the Assessing Officer did not conduct any inquiry and ascertain the net profit rate of other comparable contractors. On the other hand, he disallowed expenditure of Rs. 10.61 crores resulting in abnormal gross profit rate of 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and a higher profit rate should be attributed. By order dated 19.08.2014, counsel for revenue was required to ascertain the said aspect. It is stated at Bar that the Assessing Officer has not given any comments in this regard. Noticeably, counsel for the assessee had earlier produced before us a copy of the assessment order relating to assessment year 2010-11, wherein the Assessing Officer himself had applied net profit rate of 8% on contractual receipt of Rs. 6.66 crores and net profit rate of 3% on supply receipts of Rs. 7.21 crores. As per the said order, the total receipts were to the tune of about Rs. 14 crores. In the present assessment year the total turnover of the assessee was about Rs. 18 crores. In these circumstances we are not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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