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TMI Blog2018 (7) TMI 2137X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. AO estimated the income based on the information obtained from KSBCL authorities disclosing the percentage of profit on sale fixed by the Karnataka government. It is not the case of the AO that the books were not properly maintained. Not even a word has been whispered by the AO that the books were not in accordance with the method of accounting, or were incorrect / incomplete. In our view, the laws commands us to set aside the assessment made on the basis of estimation, if the AO made the estimation without rejecting the books of account. - Decided in favour of assessee. - I.T.A. No. 1320/Bang/2017 - - - Dated:- 31-7-2018 - SHRI. JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER For the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Liquor business. During the course of proceedings it is noticed that the assessee has declared Less Gross Profit i.e., @6.36%, it is very less, further the undersigned issued an letter to KSBCL authorities calling for the percentage of profit on sale fixed by the Karnataka Government during the period 01-04-2008 to 31- 03-2009 to retailers, in this regard the KSBCL authorities replied stating that the retailer is getting 20% profit on sale of liquor and they have also furnished item wise details, in this regard the undersigned has given an opportunity to explain or objection if any, but the assessee was not able to explain with proper evidence and the assessee has expressed at the time of hearing that it is a competitive business, we canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT (A) considering the oral situation had taken the previous year s GP which was accepted by the assessee. The assessee pleaded that the GP declared by the assessee at 6.71% should be accepted. 05. The Ld. DR vehemently supported the orders of the lower authorities. 06. We have heard the rival contentions and perused the record. We find that the High Courts in the matter of CIT v. Anil Kumar Co., [(2016) 67 Taxmann.com 278 (Kar)], CIT v. Symphony Comfort System Ltd [(2013) 35 taxmann.com 533 (Guj)] and PCIT v. Marg Ltd [(2017) 84 taxmann.com 52 (Mad), have held that no addition can be made on estimated basis without rejecting books of account of assessee. In Marg Ltd (supra), the assessment order is passed u/s.144 of the Act, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such exercise undertaken by them was not sustainable. Section 145(3) of the Act lays down that the Assessing Officer can proceed to make assessment to the best of his judgment under section 144 of the Act only in the event of not being satisfied with the correctness of the accounts produced by the assessee. In the instant case the Assessing Officer has not rejected the books of account of the assessee. To put it differently the Assessing Officer has not made out a case that conditions laid in Section 145(3) of the Act are satisfied for rejection of the books of account. Thus, when the books of account are maintained by the assessee in accordance with the system of accounting, in the regular course of his business, same would form the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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