TaxTMI 
TaxTMI 
INCOME ESTIMATION AND ALLOWABILITY OF EXPENDITURE
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....NCOME ESTIMATION AND ALLOWABILITY OF EXPENDITURE<br> Query (Issue) Started By: - Kishor Vishnu Dated:- 9-3-2011 Last Reply Date:- 23-7-2011 Income Tax<br>Got 1 Reply<br>Income Tax<br>In case of one of....
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.... my client income for the A Y 2006-07 has been estimated @ 8% although his turnover exceeded Rs. 40 Lacs. Moreover for the A Y 2005-06 labour expenditure was disallowed u/s. 40(a)(ia). Since tax deduc....
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....ted on the said labour expenditure was paid during the F Y 2005-06, so can i setoff such disallowed laobur expenditure for the A Y 2005-06 against the income estimated for the A Y 2006-07. Reply By M....
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....OHAN S: The Reply: Dear Kishor, You have not stated how the Assessing Officer has estimated the profit at 8% of turnover when the books are subject to audit u/s 44AB. If the A.O has rejected the boo....
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....k results he must have given clear reasons for the same. Recently High Courts have ( I dont remember the citation readily) held thet without rejecting the books estimate cannot be made. If books are r....
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....ejected the A.O must record with proper evidence the reasons for such rejection. Regarding your query on allowing deduction of earlier year expenditure u/s 40 (a) (ia) I feel it must be allowed by th....
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....e A.O as it has nothing to do with the Estimation of income of A.Y 2006-07 Even in the normal case without estimation this shall be allowed and I find no reason for the A.O to deny this claim.<br> Dis....
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