INCOME TAX ACT, 1961

Section 145

Accounting method - Rejection of books of account - Addition to income whether an automatic consequence after books of account are rejected -

Assessee assailed the trading addition made by revenue after rejection of its books of account contending that assessee-company had declared a better trading result as compared to previous years and therefore, no addition in its hand was warranted. Held: It is a settled legal proposition that mere rejection of books of accounts are not sufficient to hold that the trading additions have to be necessarily made in the hands of the assessee company. Where the assessee company had declared a better trading results as compared to previous years, such results provide a reasonable basis to hold that there should not be any addition in the hands of the assessee company.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 37(1)

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