The pattern of assessment under the IT Act is given by s.29/144 which states that the income from profits and gains of business shall be computed in accordance with the provisions contained in ss.30 to 43D. Sec. 40 provides for certain disallowance in certain cases notwithstanding that those amounts are allowed generally under other sections. The computation under s.29 is to be made under s. 145 on the basis of the books regularly maintained by the assessee. If those books are not correct or complete, the ITO may reject those books and estimate the income to the best of his judgement. When such an estimate is made it is in substitution of the income that is to be computed under s. 29. In other words, all the deductions which are referred to under s. 29 are deemed to have been taken into account while making such an estimate. This will also that the embargo placed in s. 40 also taken into account (Indwell Constructions vs. Commissioner of Income Tax (1998) 232 ITR 776 (AP) followed).
Related Posts:
- Asha Gandhi vs. ITO (ITAT Chandigarh) In my experience as a dispenser of Justice, I have noticed that generally the violations of tax laws by new assessees do not occur because they are so desired but because of sheer lack of proper advice. Instead of letting these sparks of economic change stifle and die due to…
- Vijay Kumar vs. ITO (ITAT Chandigarh) The impugned additions have been made by the Assessing Officer on certain other issues, whereas, the case of the assessee was selected for the purpose of limited scrutiny relating to security transactions. The additions made by the Assessing Officer, thus, being exceeding his jurisdiction are not sustainable in the eyes…
- Pankil Garg vs. PCIT (ITAT Chandigarh) As per the provisions of section 56 (2) (vi i) of the Act , though the members of the 'HUF' are to be taken relatives of the 'HUF' for the purpose of the said sect ion, however, the converse is not true that is to say that 'HUF' is not…
- Punjab Cricket Association vs. ACIT (ITAT Chandigarh) The assessee is regularly following commercial activity by commercially exploiting its property and rights to hold matches and thereby earning huge income, hence the said activity can not be said to be incidental activity rather the commercial exploitation of the match is one of the main activity of the assessee,…
- Keva Industries Pvt. Ltd vs. ITO (ITAT Mumbai) We hold that since the shares of a foreign company were acquired by the assessee company in the instant case, the ld AO ought to have relied on the balance sheet as audited by the auditor appointed under the Indian Companies Act. In the instant case, the ld AO had…
- Connectwell Industries Pvt. Ltd vs. UOI (Supreme Court) The property in dispute was mortgaged by BPIL to the Union Bank of India in 2000 and the DRT passed an order of recovery against the BPIL in 2002. The recovery certificate was issued immediately, pursuant to which an attachment order was passed prior to the date on which notice…
Leave a Reply