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TMI BlogINCOME ESTIMATION AND ALLOWABILITY OF EXPENDITUREX X X X Extracts X X X X X X X X Extracts X X X X ..... INCOME ESTIMATION AND ALLOWABILITY OF EXPENDITURE X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted 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 2006-07. Reply By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok 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 cannot be made. If books are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 to deny this claim. X X X X Extracts X X X X X X X X Extracts X X X X ..... scussion Forum - Knowledge Sharing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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