Even if income is assessed by estimation on GP rate disallowance u/s. 40A(3) can be made

The argument that if income is assessed by estimation on GP rate, no other dis allowance can be made is not of universal application. If expenditure which is legally not permissible has been taken into account that can certainly be disallowed even where income is estimated. Though the provisions of block assessment are special, the argument that they are a complete Code and the other provisions cannot apply is not acceptable. Section 40A(3) of the Income tax Act applies to block proceedings CIT Vs. M/s Sai Metal Works (P&H High Court) Income-tax Appeal No. 125 of 2004 and other connected a...