India - Income Tax Act 2010 - Saarc

1.289 CH. IV - COMPUTATION OF BUSINESS INCOME S. 44ADconstruction or supply of labour for civil construction, a sum equal to eight percent of the gross receipts paid or payable to the assessee in the previous year onaccount of such business or, as the case may be, a sum higher than the aforesaidsum as declared by the assessee in his return of income, shall be deemed to bethe profits and gains of such business chargeable to tax under the head “Profitsand gains of business or profession”:Provided that nothing contained in this sub-section shall apply in case theaforesaid gross receipts paid or payable exceed an amount of forty lakh rupees.(2) Any deduction allowable under the provisions of sections 30 to 38 shall, forthe purposes of sub-section (1), be deemed to have been already given full effectto and no further deduction under those sections shall be allowed :94[Provided that where the assessee is a firm, the salary and interest paid to itspartners shall be deducted from the income computed under sub-section (1)subject to the conditions and limits specified in clause (b) of section 40.](3) The written down value of any asset used for the purpose of the businessreferred to in sub-section (1) shall be deemed to have been calculated as if theassessee had claimed and had been actually allowed the deduction in respect ofthe depreciation for each of the relevant assessment years.(4) The provisions of sections 44AA and 44AB shall not apply in so far as theyrelate to the business referred to in sub-section (1) and in computing themonetary limits under those sections, the gross receipts or, as the case may be,the income from the said business shall be excluded.95[(5) Nothing contained in the foregoing provisions of this section shall apply,where the assessee claims and produces evidence to prove that the profits andgains from the aforesaid business during the previous year relevant to theassessment year commencing on the 1st day of April, 1997 or any earlierassessment year, are lower than the profits and gains specified in sub-section (1),and thereupon the Assessing Officer shall proceed to make an assessment of thetotal income or loss of the assessee and determine the sum payable by theassessee on the basis of assessment made under sub-section (3) of section 143.]96[(6) Notwithstanding anything contained in the foregoing provisions of this section,an assessee may claim lower profits and gains than the profits and gainsspecified in sub-section (1), if he keeps and maintains such books of account andother documents as required under sub-section (2) of section 44AA and gets hisaccounts audited and furnishes a report of such audit as required under section44AB.]Explanation.—For the purposes of this section, the expression “civil construction”includes—(a) the construction or repair of any building, bridge, dam or otherstructure or of any canal or road;(b) the execution of any works contract.]94. Inserted by the Finance Act, 1997, w.r.e.f. 1-4-1994.95. Inserted by the Income-tax (Second Amendment) Act, 1998, w.r.e.f. 1-4-1997. Earlier subsection(5) was inserted by the Finance Act, 1994, w.e.f. 1-4-1994 and later on omitted bythe Finance Act, 1997, w.e.f. 1-4-1997.96. Inserted by the Finance Act, 1999, w.r.e.f. 1-4-1998.