2015 (7) TMI 1219

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....harges for processing the stones. During the course of assessment proceedings, the AO rejected the books of account of the assessee besides disallowance of Rs. 3,12,891/- was made u/s 40(a)(ia) of the Act for non-deduction of TDS. 2.2 In first appeal, the ld. CIT(A) upheld the rejection of books of account of the assessee however qua 40(a)(ia) disallowance partly accepted the plea of the assessee that in case of rejection of books of account and estimation of profit, no other addition/disallowance can be made by following observations. "4.3 ................. There is some merit in the submissions of the A.R. that gross profit rate has already been applied by ld. CIT(A) vide his order ITA No. 604/07-08 dated 21-05-2008.Therefore,....

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....hase, no disallowance u/s 40A(3), read with rule 6DD(j), could be made by Assessing Officer - Held, Yes.' The ld. AR further relied on ITAT Hyderabad decision in the case of Teja Construction vs. ACIT, (2010) 39 SOT 13 (URO) wherein it is held as under:- "Section 145, read with Section 40(a)(ia)of the I.T. Act, 1961- Method of accounting - Rejection of accounts - Assessment year 2005-06 - Whether once books of account are rejected and estimation of income is made, further disallowance u/s 40(a)(ia) is unwarranted - Held, Yes.'' Similar view has been taken in these cases. (i) ITO vs. Mark Construction (2012) 23 Taxman.com 398 (ITAT Kolkata Bench). (ii) Ecoasafalt Sa vs. ADIT (Inv.), 24 Taxman. Com 349 (ITAT Delhi Bench) ....