Description:
Books of account rejected – income calculated on estimated basis – No further addition can be made.
In absence of complete books of account during the assessment proceedings, the books of account was rejected and the income of the assessee was estimated. The A.O. further made addition on account of unsecured loans, disallowance of depreciation, expenses, etc. It was held that once the books of account are rejected and total Income of the assessee was finally assessed on estimated basis, no further addition can be made.
ITO vs. Naresh H. Shah, (Mumbai Tribunal) ITA No. 3187/M/2010, Bench “F” A.Y. 2005-06 dt. 15-7-2011.
Source:
1. www.aiftponline.org
2. AIFTP TIMES Volume.2 No.11.October, 2011. Page No.9.
Our Comment:
In our opinion, only the income part is covered when income is estimated after rejecting the books of accounts. The other issues regarding capital receipts, other receipts are subject to verification.
