9911796707
TMI Blog1995 (6) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer (AO) issued a letter on the same day to the assessee proposing to complete the assessment ex parte estimating the income at 10-1/2% of the kist amount and also to treat the amount of capital introduced by the partners as income from other sources of the firm. The assessee produced five partners from whom statements were recorded by the AO. However, as neither the books nor the remaining partners were produced and in the absence of explanation as to the source for the amounts introduced by them as capital in the firm, the AO completed the assessment as follows: . . Rs (a) Net income from abkari business estimated at 10-1/2% of the kist 1,02,000 (b) The disallowance of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books before the AO. The CIT(A) has found that the assessee had not maintained proper accounts. So this is a fit case calling for estimate of income after the rejection of accounts. The estimate has to be made according to the best of judgment. In making such an estimate upon rejection of accounts, it would not be proper to make specific additions individually though the defects noticed in the accounts might weigh with the assessing authority in making a comprehensive estimate. The specific addition of Rs. 2,90,400 being the kist amount paid in the month of March, 1984—just in the month preceding the beginning of the previous year—has been disallowed by the AO under s. 43B of the Act, in the course of best judgment assessment. Abkari Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment in terms of r. 18 will represent the dues for the period from 1st April of the year to 31st March of the year following. Even if it is viewed as advance payment in the asst. yr. 1984-85, since the right to vend to arrack was available to the assessee only w.e.f. 1st April, 1984, the advance payment gets converted into the expenditure for the period from 1st April, 1984 to 31st March, 1985 relevant to the asst. yr. 1985-86, in the specific terms of rr. 18 and 10 of the Abkari Rules. There is nothing in the context of s. 43B preventing the assessee to make an advance payment and then treat it as an expenditure in the year of consumption or utilisation. Sec. 43B cannot be invoked in such circumstances. For all these reasons, we delete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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