TaxTMI 
TaxTMI 
2012 (11) TMI 338
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.... same are dismissed as not pressed. 3. Ground No. 5 reads as under:- "Without least prejudice to above the appellant further submits that the CIT(A)'s conf irming 8% income on the total turnover of Rs. 18.05 crores is just on par with the provision of sec. 44AD where if the turnover does not exceed Rs. 40 lakhs income can be estimated at 8% whereas in the case of the assessee the total turnover is 45 times of the turnover mentioned u/s 44AD therefore the kind of estimation is totally unwarranted and unjust." 4. Briefly the facts relating to rise this ground are that the assessee had gross contract receipts of Rs. 18.05 crores. Since the assessee failed to produce the books of account and bills/vouchers for verificatio....
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....n when gross contract receipts exceed Rs. 40 lakhs. In this context, it is relevant to refer to the decision of the Hon'ble Jurisdictional ITAT Hyderabad "A" Bench, in the case of Madhava Constructions Pvt. Ltd. Vs. ACIT, in ITA no. 1143/Hyd/2006 dated 13/07/2007, wherein the Hon'ble Tribunal observed that provisions of section 44AD may be applicable where the gross contract receipts exceeds Rs. 40 lakhs. The observations made by the Hon'ble ITAT in the said order at page 6 & 7, which are relevant, are as under:- "We are aware of the fact that sec. 44AD of the Act is applicable only in cases where gross contract receipts exceed Rs. 40 lakhs. But we are of the view that one can take the help of these provisions for reasonable and fair est....
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....though it is not applicable, held that the estimation of income at 8% of the turnover is reasonable. In our opinion, in this case, estimation at 8% is very reasonable because the Tribunal estimated the income ranging from 8% to 12.5 % depending upon the facts of the situation. Therefore, the order of the CIT(A) is hereby upheld and the income shall be estimated at 8% of the gross contract receipts. Accordingly, this ground of appeal of the assessee is dismissed. 8. Ground Nos. 7 & 8 are as follows:- "7. Without prejudice to the above, the learned CIT(A) should not have conf irmed the addition of Rs. 9,10,587/- being sale proceed of scrap material, it is because when once income is estimated the kind of receipt by the assessee cannot furt....
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....assessee's contention is not correct as the miscellaneous income is to be treated as 'income from other sources' and does not fall under business income. The assessee has submitted that miscellaneous income was received from sale of scrap and other building materials. Hence, we are in confirmity with the order of the CIT(A) in holding that there is no such receipts have nexus with the contract receipts received by the assessee from execution of civil construction works. Hence, the addition made by the AO and sustained by the CIT(A) of Rs. 9,10,587/- under 'income from other sources' is confirmed. Thus, this ground of appeal is dismissed. 13. As regards the ground No. 8 pertaining to the disallowance of the amount of Rs. 1,00,200/- u/s 40....