TMI BlogINCOME ESTIMATION AND ALLOWABILITY OF EXPENDITUREX X X X Extracts X X X X X X X X Extracts X X X X ..... In case of one of my client income for the A Y 2006-07 has been estimated @ 8% although his turnover exceeded Rs. 40 Lacs. Moreover for the A Y 2005-06 labour expenditure was disallowed u/s. 40(a)(ia) . Since tax deducted on the said labour expenditure was paid during the F Y 2005-06, so can i setoff such disallowed laobur expenditure for the A Y 2005-06 against the income estimated for the A Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07. - Reply By MOHAN S - The Reply = Dear Kishor, You have not stated how the Assessing Officer has estimated the profit at 8% of turnover when the books are subject to audit u/s 44AB. If the A.O has rejected the book results he must have given clear reasons for the same. Recently High Courts have ( I dont remember the citation readily) held thet without rejecting the books estimate can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be made. If books are rejected the A.O must record with proper evidence the reasons for such rejection. Regarding your query on allowing deduction of earlier year expenditure u/s 40 (a) (ia) I feel it must be allowed by the A.O as it has nothing to do with the Estimation of income of A.Y 2006-07 Even in the normal case without estimation this shall be allowed and I find no reason for the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deny this claim. - INCOME ESTIMATION AND ALLOWABILITY OF EXPENDITURE - Query Started By: - Kishor Vishnu Dated:- 9-3-2011 Income Tax - Got 1 Reply - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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