Geo Tech Construction Corporation v. Dy. CIT & Anr.
INCOME TAX ACT, 1961
Method of accounting - Rejection of accounts -Computation of work-in-progress
Assessee-firm was engaged in execution of civil contracts. During assessment proceedings, AO observed that expenditure was accounted for on an accrual basis, but receipts were disclosed only on cash basis and there was no disclosure of work-in-progress as at beginning of year or at end of year and thereafter, he made estimation of closing/opening work-in-progress and accordingly, made addition of difference in assessees total income on account of work-in-progress. Held:For income calculation as per law, work-in-progress required to be computed, therefore, addition made by AO was justified.
Income-tax Act, 1961, Section 145
A.Y. :1988-89
Decision: In favour of assessee.
Case Law Analysis:CIT v. Geo Tech Construction Corpn. [1996] 221 ITR 164 (Ker.) [Para 2], S. Veeriah Reddiar v. CIT [1960] 38 ITR 152 (Ker.) [Para 3], P.M. Mohammed Meerakhan v. CIT [1969] 73 ITR 735 (SC) [Para 4], CIT v. A. Krishnaswami Mudaliar [1964] 53 ITR 122 (SC) [Para 4] and CIT v. British Paints India Ltd. [1991] 188 ITR 44/ 54 Taxman 499 (SC) [Para 4].