KESAR SINGH Vs. CIT

JUDGEMENT

(1.) THE assessee has preferred this appeal under section 260A of the Income -tax Act, 1961 (in short, "the Act"), against the judgment of the Income -tax Appellate Tribunal, Amritsar Bench, Amritsar dated May 29, 2009 in I. T. A. No. 216(ASR)/2009 and C. O. No. 17 (ASR)/ 2009 (assessment year 2006 -07), proposing to raise the following substan'tial questions of law :

(2.) THE assessee is a labour contractor. He filed his return declaring his income equal to 3 per cent, of the net profit. Gross receipts were declared to be Rs. 3,01,36,669, while the net profit was shown to be Rs. 9,03,274. The Assessing Officer rejected the figure of net profit worked out by the assessee on the ground that the expenses debited to the profit and loss account were not verifiable. It was held that in such a situation, the net profit rate should be worked out in accordance with the provisions of section 44AD, of the Act, i.e., 8 per cent, in the case of a civil contractor where account books, are not maintained. It was observed that though the section applied where the receipts were up to Rs. 40 lakhs, the same rate could be applied even to contracts where the receipts were beyond the said limit, where no accounts and documents were produced and application of such a rate was otherwise proper. Accordingly, the Assessing Officer made the assessment.

(3.) ON further appeal, the Tribunal directed the Assessing Officer to complete the assessment as per the books of account.