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2009 (1) TMI 854 - HC - Income TaxRejection of books of accounts - Invoking the provisions of Section 145(3) - estimating the sales and G.P rate - Tribunal has upheld the order passed by the CIT(A) restricting the enhanced sales - assessee had declared GP rate of 25.95 per cent in the AY1995-96, Tribunal held that the same GP rate should be applied to the assessment year in question as well. Whether the Tribunal was justified in confirming the finding of ld CIT(A) ignoring the fact and finding given by the AO that purchase bill of marble blocks showed no weight or measurement and no stock register was maintained and by considering the comparable case of Anil Marbles (P) Ltd., the GP rate 32.12 per cent taken and made addition? - HELD THAT:- It is not the law that books of account of assessee having been rejected as unreliable u/s.145(3), the sales returned by the assessee must necessarily be rejected and such sales should be estimated at higher figure than returned by the assessee. Even after, the rejection of the books of account the AO is under obligation to determine as to whether the sales as returned by the assessee should be accepted or higher sales should be estimated. The estimated sales must be determined fairly on the basis of relevant material on record. As noticed by CIT(A), while determining the estimated sales AO had not considered the relevant aspects. Therefore, the estimated sales determined by the CIT(A) appear to be just and reasonable. It is to be noticed that as in the case of AKJ Granites (P) Ltd. [2007 (4) TMI 196 - RAJASTHAN HIGH COURT], the CIT(A) has found that the case of M/s Anil Marbles was not comparable case for the purpose of lifting the GP rate to be applied to the case of the assessee inasmuch as while adopting the said GP rate, the AO has not considered the investments, locality, year of establishment of business, manpower utilized, availability of raw material etc. of both the cases. The Tribunal while determining the GP rate as 25.95 per cent has taken into consideration the GP rate declared by the assessee during the AY 1995-96, which undoubtedly is relevant consideration. Moreover, as laid down by this Court in AKJ Granites (P) Ltd. (supra), the best judgment itself is based on estimate and cannot be scaled at exactitude. Thus, in our considered opinion, the GP rate adopted by the Tribunal as aforesaid also cannot be faulted with. For the aforementioned reasons, we answer the substantial question framed by this Court as aforesaid in favour of the assessee and against the Revenue. In the result, the appeal fails, it is hereby dismissed.
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