TMI Blog2005 (2) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... n 143 read with section 147 on 29-3-1996 estimating an income at Rs. 40,000 after ignoring the loss. The Assessing Officer also added a sum of Rs. 92,000 on account of understatement of closing stock. The matter was carried in appeal before the learned CIT(A). Learned CIT(A) vide order dated 20th March, 1997 set aside the order with directions to verify the books of account and determine the total income. The set aside assessment was taken up wherein the learned counsel for assessee appeared and furnished the details required. Pending the completion of set aside assessment a survey was conducted at the premises of one Mr. Valerian Pinto, the Managing Partner of the firm. The Assessing Officer completed the assessment under section 158BC r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insurance premium. All these vouchers are verifiable. The basis on which 2% is treated as the net profit for the block period cannot be the basis for the years under appeal also. The Assessing Officer himself have noted that the assessee appeared from time-to-time and furnished required details. Thus, there are no basis either to reject the books of account or to estimate the net profit as high as 2%. Thus, in the absence of any justification and in the absence of any material to hold that the books of account are not reliable, the loss declared by the assessee should be accepted. 4. Learned Departmental Representative Shri Manjunatha Swamy heavily relied upon the orders of authorities below. He submitted that the assessee has huge tur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities or even by the Court. On the other hand, if the finding on any of the question No. (1), (3) or (4) is in the negative (no), section 145(2) applies and the Assessing Officer may make a best judgment assessment in the manner provided in section 144. Even, there the books may not be disregarded altogether. The assessment may be adjusted to cure the extent of the infirmity found, so as to make it a best judgment assessment. Since the Assessing Officer failed to point towards any defect in the accounts whereby he was of the opinion that income cannot be properly deduced therefrom, the Assessing Officer is not justified in rejecting the book results. We, accordingly, set aside the assessment order and direct the Assessing Officer to acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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