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2012 (10) TMI 888 - AT - Income TaxRejection of books of accounts - Disallowance u/s 40(a)(ia) for non deduction of TDS – on account of material purchases made from M/s Radhey Shyam Gupta India (P) Ltd. (RSGIPL) - Held that:- The work has been by converting into self execution work by an act of splitting of work into a transaction of purchase and sale. The provisions of law cannot be interpreted in such a manner to convert a possible task into impossible task by such interpretation. Once the books are held to be camouflaged and not representing the assessee's proper income, in that case the proper course is to reject the books of a/c and estimate the income. The action of the lower authorities has resulted into an impossible situation i.e. holding the entire road contract receipts as the income of the assessee. It will be arbitrary and unjust to hold assessee's entire receipts as income. Since the books of accounts are not reliable, they deserve to be rejected and in that case a reasonable estimate of income has to be made. In our view, ends of justice will be met if a fair and reasonable estimate is made in place of technicalities of applicability of sec. 40(a)(ia); the debate about words 'paid and payable' and the debate about revenue having not proceeded against the assessee u/s 201(1). To put rest to these technical debates, it will be in the interest of justice to make a reasonable estimate of assessee's income, when its work execution has not been questioned. - Income estimated at 6% i.e. 8% minus 2% for subletting. - Decided partly in favor of assessee.
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