Sec 44AD - Presumptive Taxation

A real-estate developer and promoter is altogether different from a contractor or a person undertaking a mere civil construction. The profit of promotion business may be more or less than 8 per cent, depending upon a number of factors -- location, nature and character of the land, whether the land is free from encumbrance or not, whether the premises is tenanted and so on (in which case tenant is to be evacuated for certain consideration) and various other factors as such -- straight-jacket flat rate of 8 per cent rate of profit on the gross receipts or turnover is neither applicable nor warranted in such cases.

Real-estate developer must maintain books of accounts for fair estimate of profit on year to year basis but he is not necessarily required to get his accounts audited as provided in sub-section (6) in Section 44AD if the profit arrived at in a financial year is less than 8 per cent of the gross receipts or turnover.