Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (11) TMI 223 - AT - Income TaxRejection of Books of accounts - Incomplete books of accounts - CIT deleted rejection - Held that:- if the AO was not satisfied with the quantum of expenses, he could have proceeded to disallow them on adhoc basis. Simply because the volume of expenses have increased during the year vis-à-vis earlier year that cannot be a ground for rejecting the books of account. - it is difficult to accept that the books of accounts of the assessee are defective or incomplete from which the correct profit cannot be deduced. The books of accounts are audited, the auditors have not given any adverse comments in the maintenance of books of account or stock registers - Decided against Revenue. Disallowance of future losses - 100% loss claimed even when project was not 100% completed - AS-7 Followed - Held that:- It is a fact that AS-7 has not been notified by the Central Government. This does not mean that the assessee is precluded from following AS-7. A perusal of the provisions of Sec. 145 show that Accounting Standards which have been notified by the Central Government have to be mandatorily followed by the assessee. But this does not mean that the assessee cannot follow the other Accounting standards issued by ICAI. ICAI being the highest accounting body of the country, created by an Act of Parliament, Accounting Standards issued by it cannot be brushed aside lightly. On the contrary, if an assessee is following the Accounting Standards issued by ICAI, it would give more credibility and authenticity to its account The matching principle is of relevance where income and expenditure, both are to be considered together. However, in the instant case, the effect of valuation of WIP would automatically affect the profits of subsequent years accordingly. Therefore, there was no reason for not accepting in principle the assessee’s claim as being allowable - Following decision of Jacobs Engineering India (P.) Ltd. Versus Assistant Commissioner of Income-tax 8(2), Mumbai [2009 (5) TMI 601 - ITAT MUMBAI] - Decided against Revenue.
|