COMMISSIONER OF INCOME-TAX, CENTRAL REVENUE BUILDING, MAIN ROAD, RANCHI Vs. MINI CONSTRUCTION, CHURCH ROAD, PALAMAU

JUDGEMENT

(1.) Heard learned counsel for the parties. This appeal is arising out of the order dated 19.09.2008 passed by the Income Tax Appellate Tribunal, Circuit Bench, Ranchi In I.T.A. No. 440/Pat/2007 pertaining to Assessment Year 2004-05, whereby the Revenue's appeal was dismissed by the I.T.A.T.

(2.) The brief facts of the case are that the A.O. made the Assessment order on 26.12.2006 for the assessment year 2004-05 for the assessee who submitted his returns of income declaring his total income of Rs. 44,12,000/- and claimed the refund of Rs. 8,93,603/-. The returns was processed under Section 143(1) of the Income Tax Act, 1961 (for short-Act of 1961). The assessee is a contractor. The assessee's assessment was processed and the A.O. held that since the assessee simply filed a copy of the ledger and accounts of few of the expenditures and some photocopies of the purchase bills, but neither the cash book nor the complete ledger and accounts of expenses were produced and none of the expenses was verifiable with original bills/vouchers and the assessee was given full opportunity to produce the books of accounts but he did not produce the books of accounts, the details furnished by the assessee appears to be unreliable. The books of accounts were, therefore, rejected and the A.O. proceeded to determine the total income for the Assessment Year 2004-05. Since the assessee's total receipt was more than Rs. 40 lakhs, according to A.O., the provision of Section 44AD of the Act of 1961 as was applicable for the Assessment Year 2004-05, was not applicable. After detailed discussion with respect to the assessment of the profit and taxable income of the assessee, the A.O. very specifically held that though Section 44AD of the Act of 1961 has no application but it will be reasonable to take help of the provision of Section 44AD only for the purpose of quantification which will be just quantification for the purpose of taxing the liability. Taking hint from the said provision and after considering the relevant facts including the difference between the profit which should have been, the A.O. independently held that 8% can be assessed as an income of the assessee out of the contract work done by the assessee; meaning thereby, the A.O. held that the 8% of the gross contract receipt is the income of the assessee. Thereafter, the learned A.O. allowed certain deductions which were not allowable if Section 44AD of the Act of 1961 would have been applicable by virtue of Subsection 2 of Section 44AD of the Act, which prescribes that any deduction allowable under Sections 30 to 38 shall, for the purpose of Subsection (1) of Section 44AD, be deemed to have been already given full effect to and no further deduction under those Sections shall be allowed.

(3.) The Revenue preferred appeal before the C.I.T. (A), Ranchi, Jharkhand. The Revenue's appeal was dismissed and, therefore, Revenue preferred further appeal before the Tribunal which was decided along with the 'Cross Objection' filed by the assessee vide its impugned order dated 19.09.2008.