Insignificant decline in G.P. cannot be a reason for addition

Ramanand Industries Vs ITO (ITAT Jaipur) It is settled proposition of law that even if the books of account are rejected U/s 145(3) of the Act, it would not ipso facto result to an addition except the income estimated on same reasonable and proper basis lead to an addition. In the case in hand, neither the Assessing Officer nor the ld. CIT(A) has undertaken an exercise to estimate the income of the assessee on some proper and reasonable basis and therefore the ad hoc addition made by the Assessing Officer as well as the ld. CIT(A) is not permissible under the provisions of the Act. After the r...