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2014 (12) TMI 4 - ITAT HYDERABADEstimation restored by CIT(A) - Receipt of sub-contract payments - Whether the CIT(A) erred in resorting to estimation even in respect of so called sub-contractors, who either denied having done any work or denied receipt of sub-contract payments – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that the AO disallowed various amounts only of sub-contracts given by assessee and in some cases monies seems to have deposited or advanced to the Directors of the assessee company - revenue could not point out any of those clinching evidences which are to be excluded from the turnover or to be brought to tax separately - as both the authorities of Revenue accepted the estimation of income and as CIT(A) resorted to estimation based on the norms already been formed in this regard i.e., estimation of income at 12.5% on the main contracts and 8% on subcontracts undertaken, there was no reason to interfere with the order of the CIT(A) – Decided against revenue. Disallowance u/s 40(a)(ia) deleted – Held that:- Following the decision in Indwell Constructions vs. CIT [1998 (3) TMI 121 - ANDHRA PRADESH High Court] - section 40 provides for certain disallowances in certain cases notwithstanding that those amounts are allowed generally under other sections - The computation under Section 29 is to be made under section 145 on the basis of the books regularly maintained by the assessee - If those books are not correct or complete, the Income-tax Officer may reject those books and estimate the income to the best of his judgment - when such an estimate is made it is in substitution of the income that is to be computed u/s 29 - all the deductions which are referred to u/s 29 are deemed to have been taken into account while making such an estimate - the embargo placed in Section 40 is also taken into account – the order of the CIT(A) is upheld – Decided against revenue.
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