https://www.taxtmi.com/caselaws?id=373891 Rejection of books under section 145(3) requires specific defects showing that accounts are incorrect or incomplete; a fall in gross profit rate and lack of product-wise raw-material correlation alone permit further enquiry but not income estimation. Audited accounts and stock records without evidence of suppressed sales or inflated expenditure therefore did not support a gross-profit addition. Section 40(a)(ia) applies to deductible outgoing expenditure, not capitalised software cost where no revenue deduction is claimed and depreciation is claimed only as a statutory allowance. Consequently, disallowance for non-deduction of tax at source could not be made against the capitalised software expenditure. en-us Wed, 02 Jan 2019 00:00:00 +0530 Tue, 22 Jan 2019 08:05:20 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=373891 Rejection of books under section 145(3) requires specific defects showing that accounts are incorrect or incomplete; a fall in gross profit rate and lack of product-wise raw-material correlation alone permit further enquiry but not income estimation. Audited accounts and stock records without evidence of suppressed sales or inflated expenditure therefore did not support a gross-profit addition. Section 40(a)(ia) applies to deductible outgoing expenditure, not capitalised software cost where no revenue deduction is claimed and depreciation is claimed only as a statutory allowance. Consequently, disallowance for non-deduction of tax at source could not be made against the capitalised software expenditure. Case-Laws Income Tax Wed, 02 Jan 2019 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=373891