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2012 (5) TMI 436 - AT - Income TaxRejection of book of accoutns - Estimation of income at 5% of the gross turnover of the company - A.O. noticed that there are huge losses incurred by the assessee and the losses cannot be accepted as the projects undertaken by the assessee were having escalation clause - held that:- The provision empowers the A.O. to reject the books of account and estimate income as provided under section 144 / 145 only if he is satisfied about the correctness and completeness of accounts of assessee or accounting standards notified have not been followed by the assessee. The assessee has maintained complete books of account including vouchers and also justified the increase in cost, reasons for suffering losses and also the fact that stock registers were maintained at the respective places. Just because the assessee has suffered losses, it does not mean that the assessee's books of account are to be rejected. Assessee has maintained complete books of account including vouchers and also justified the increase in cost, reasons for suffering losses and also the fact that stock registers were maintained at the respective places - The assessee also justified why it has suffered losses by giving detailed reasons including the escalation clause, cost of increase in material and difficulty in implementing the road projects in Naxal-hit areas as a new venture - Decided in favor of the assessee
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