INCOME TAX ACT 1961

Presumptive taxation under section 44AD - Civil construction business -Estimation of income -

The assessee-firm returned its income. The Assessing Officer computed the total income of the assessee at a higher figure. Commissioner appeals had estimated the profit of the assessee at 8 per cent of the contract receipts. He interfered with the assessment order on the ground that if the total addition made by the Assessing Officer was allowed to remain or accepted, then the net profit of the assessee was nearly 28 per cent, which was not at all possible in the nature of the work undertaken by the assessee. Held : The estimation had been made on the sole ground that the accounts maintained by the assessee had not been proper. The Tribunal had also taken into consideration that under section 44AD even when the books of account were not maintained, income had to be estimated only at 8 per cent. Therefore A.O was not justified.

Income tax act 1961 section 44AD

Decision : In favour of assessee.
A.Y : 2002-03

Commissioner of Gift Tax v. A. Vajjiram & Bros.