9911796707
TMI Blog2002 (11) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... a sub-contractor of Tata Robin Frasers Limited and during the assessment year, he had executed work as a sub-contractor under the principal contractor. Admittedly, the petitioner did not maintain accounts relating to the sub-contract works. In that situation, the Assessing Officer invoked section 44AD of the Act and presumed the income of the assessee at eight per cent. of the gross receipts payable to the assessee by the principal contractor during the previous year on account of the sub-contract business. It is in that context that the assessee has challenged the constitutional validity of section 44AD of the Act. Section 44AD of the Act contains a special provision for computing profits and gains of business of civil construction, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in East India Tobacco Co. v. State of Andhra Pradesh, AIR 1962 SC 1733; [1962] 13 STC 529, it is open to the assessee to challenge the validity of the relevant provision under the Income-tax Act to be violative of the fundamental rights of the assessee. The arguments on behalf of the assessee are met by learned standing counsel for the Income-tax Department by pointing out that section 194C of the Act operates in a different field and it has nothing to do with assessing a sub-contractor on the income he has received and section 44AD clearly indicates the income to be presumed in a case where the assessee is not in a position to produce the actual accounts and satisfy the Assessing Officer of the income received by him from such work. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the section does not dispense with a regular assessment as provided in accordance with sections 28 to 43C of the Act. It is in that context that the Assessing Officer had called upon the assessee to file a return and after scrutinising the return had made an assessment in terms of section 143(3) of the Act. The Assessing Officer has noticed that no books of account had been maintained as conceded by the assessee and the attempt of the assessee was to estimate the income at five per cent. of the gross civil contract works amount. It is in that context that the Assessing Officer took note of section 44AD of the Act and estimated the income of the assessee at eight per cent. of the gross amount covered by the civil contract. It cannot the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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