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2017 (5) TMI 923 - AT - Income TaxG.P. estimation - CIT-A applying the gross profit @ 4% as against the rate of 30% applied by the AO - Held that:- As far as the issue of rejection of books of accounts is concerned, the finding has to be upheld as in the absence of Stock Register etc. which we note has been maintained in the subsequent year, the correctness of the assessee's account, can not be said to be verifiable. The income of the assessee under consideration has to be estimated, the issue is restored back to the file of the A.O. While so directing, it may not be out of place to direct that the estimate has to be based on acceptable judicial standards and the best comparable standard can be assessee's own history. However, since the request for remand is accepted, the issue is left open to the A.O. to estimate the same taking assessee's history and/or by making a comparison with similarly placed persons in the year under consideration as the estimate made without applying judicially acceptable criteria is open to the challenge of being perverse. Thus, in order to avoid the taint of arbitrariness, the ld. AO is directed to pass a just and fair order in accordance with law. Accordingly, the impugned order is set aside back to the file of A.O. in the light of the above directions to estimate gross profit rate.
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