2009 (11) TMI 399

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....-98 by the Commissioner of Income-tax (Appeals).  The assessee was engaged as contractor in the construction of dams and laying of pipe line etc. When the returns were scrutinised, the Assessing Officer noticed that even though profit and loss account and the statement of accounts were filed, the assessee has not furnished the balance-sheet. The assessee's explanation was that for the reasons beyond its control, the, balance-sheet could not be prepared. The Assessing Officer also found that the provision for liabilities is created for crores of rupees. In order to verify the correctness of the returns filed, the Assessing Officer directed the assessee to produce the books of account. The assessee did not produce the books of account an....

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....t and details furnished by the assessee, the officer was left with no choice, but to complete the assessment under section 144. Therefore, in principle, the order of the Commissioner of Income-tax (Appeals), rejecting the assessee's demand for assessment based on returns filed was upheld by the Tribunal, However, the Tribunal found that the over importance assigned by the Commissioner of Income-tax on section 44AD, which applies to small and marginal contractors below turnover of Rs. 40 lakhs is not justified and so much so, the Tribunal, by taking into account the facts and circumstances, estimated the net income at 10 per cent. of the gross contract receipts, net of depreciation to be assessed as income from business. Even though the asse....