2016 (11) TMI 1642

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..... nce u/s 40A(2)(b) in respect of income which the assessee in his opinion ought to have earned rather than certain expenses incurred, the provisions of this section are not attracted. Therefore, uphold the impugned order on this score deleting the disallowance. - Decided against revenue. - ITA No.2326/Del/2016 Assessment Year : 2011-12 - - - Dated:- 21-11-2016 - Shri R.S. Syal, Accountant Me .....

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..... d (RVNL). This contract was sub-contracted to M/s KEC International Limited (KEC), having 60% share in joint venture in the assessee itself, for a sum of ₹ 56,88,08,172/-. The AO held that the assessee ought to have earned income from such subcontracting instead of giving it as such. He estimated income @ 4% of the contract value and made addition for the differential amount of ₹ 2,27, .....

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..... he assessee should have earned income from subcontracting. At this stage, it is relevant to note the prescription of the relevant part of Section 40A(2), which is as under :- ₹ 40A(2)(a) Where the assessee incurs any expenditure in respect of which payment has been or is to be made to any person referred to in clause (b) of this sub-section, and the Assessing Officer is of opinion .....

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