IN INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA No. 428/JU/2010 Asstt. Year : 2007-08 M/s. Kangiri Contractor, vs. Income-tax Officer, Near RHB Colony, Suratgarh. Suratgarh. (PAN AABFA 2768 C) (Appellant) (Respondent) Appellant by : Shri Suresh Ojha, A.R. Respondent by : Shri T.C. Gupta, D.R. ORDER PER JOGINDER SINGH, J.M.: This appeal is by assessee challenging order of ld. CIT(A), Bikaner dated 26.04.2010 on ground that ld. first appellate authority should have appreciated that case of assessee is squarely covered u/s. 44AD of Act, as receipts are less than Rs.40,00,000/- and profit is more than 8%. As such, addition sustained by ld. CIT(A) is unjustified. 2. During hearing of this appeal, ld. counsel for assessee filed paper book today only, but learned DR had no objection if appeal is heard today. Consequently, we are proceeding with appeal on basis of material available on record. It was submitted by ld. counsel for 2 assessee that it is case of contractor and total receipts received during relevant period were less than Rs.40,00,000/-. Therefore, case of assessee is squarely covered u/s. 44AD of Act. It was further submitted that assessee declared net profit rate at 8.15% against 8% of immediate preceding year. Assessing Officer applied net profit at 12.5% which was reduced to 9% by ld. CIT(A). crux of submissions is that net profit rate of 8.15% can be applied which will meet ends of justice. On other hand, ld. DR, though defended assessment order, but did not controvert factual matrix asserted by ld. counsel for assessee. 3. We have considered rival submissions and perused material available before us. After considering totality of facts, question arises whether separate addition can be made for work in progress ? uncontroverted fact is that assessee produced copy of balance sheet and other relevant record during assessment proceedings, first appellate stage and even before us, from which one fact is oozing out that when case of assessee is squarely covered by section 44AD of Act, therefore, adoption of net profit rate of 12.5% by ld. Assessing Officer is without any basis. Even otherwise, since turnover is less than Rs.40,00,000/-, in accordance with provisions of section 44AD of Act, assessee is 3 not obliged to maintain books of account. Consequently, assessee has correctly returned net profit rate of 8.15%. Even otherwise, if history of assessee is analyzed, net profit rate of 8.15% will meet ends of justice which will take care of every addition. Since rate of 8.15% is found justified, therefore, no separate addition can be made for work in progress, as work in progress is also part of business. Consequently, ld. Assessing Officer is directed to apply net profit rate at 8.15% as returned by assessee on gross receipts. appeal of assessee is, accordingly, allowed. Finally, appeal of assessee is disposed of as indicated above. Order pronounced in open court in presence of both sides at conclusion of hearing today on 30.09.2010. Sd/- Sd/- (K.G. BANSAL) (JOGINDER SINGH) Accountant Member Judicial Member Dated: 30th September, 2010 *aks/- Copy forwarded to:- 1. Appellant, 2. Respondent, 3. Income-tax Officer, 4. CIT, 5. D/R 6. Guard File M/s. Kangiri Contractor v. ITO