2020 (5) TMI 133

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....ed by ACIT,2(1) Ujjain. 2. Assessee has raised following grounds of appeal; "That the Ld. CIT(A) has erred in confirming the addition of Rs. 39,86,369/- by assessing net profit @ 10% on total turnover of Rs. 7,97,27,381/- as against net profit rate of 5% declared by the assessee, which is wrong and bad in law and is liable to be deleted." 3. Brief facts as culled out from the records relating to this issue are that the assessee is an individual engaged in the business of Civil Contractor. Income of Rs. 41,38,987/- declared the e-return of income filed on 30.11.2014. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) & 142(1) of the Act. During the course of hearing though the assessee submitt....

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....he books of account. The appellant has deliberately not maintained the books of account. The appellant has not submitted the method of estimating the net profit @ 5% and filing the return of income. The appellant adopted the 5% net profit as per his convenience without any basis. If It would had been the first year of the business then the non-maintenance of the books of account can be justified, but it is a consistent failure' on the part of the appellant to maintain the books of account. As per section 44AB of the 1. T. Act net profit of 8% is adopted when the turnover is below Rs. 1,00,00,000/-. But the appellant was having the turnover of more than Rs. 1,00,00,000/- therefore, section 44AD is not applicable to the appellant. Since, ....

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....eclared net profit @ 5%. 8. Provisions of section 44AD of the Act relates to "special provision for computing profits and gains of business on presumptive basis". undoubtely, the provisions of section 44AD of the Act do not apply directly on the case of assessee since total turnover is exceeding the limit prescribed u/s 44AB of the Act. However, in the case of a person having turnover below the prescribe limit u/s 44AB of the Act and not maintaining regular books of accounts and engaged in the "eligible business" i.e. any business except of business of plying, hiring or leasing goods carriages, referred to in section 44AE of the Act, then in such circumstances sub-section (1) of section 44AD of the Act provides that " Notwithstanding any....