The Appellate Tribunal addressed the issue of estimation of income and rejection of duly audited books...

The Appellate Tribunal addressed the issue of estimation of income and rejection of duly audited books of accounts of the assessee firm u/s 145(3) of the Act. It held that after rejecting the books of account, the Assessing Officer ought to have estimated the income on a logical basis. Since the income of the assessee firm for the preceding and succeeding five years had been framed u/s 143(3), the Tribunal opined that the average net profit rate of those years could safely be adopted as a yardstick for estimating its income for the year under consideration. This view was supported by the Allahabad High Court's decision in Dr. Prabhu Dayal Yadav's case. As the income disclosed by the assessee firm during the year was higher than the average ..... .....

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