Ashok Prasad Gupta Vs ITO (ITAT Kolkata)
Declared Profit Must Be Set Off Against Estimated Income: Kolkata ITAT Grants Relief in Liquor Trader Case
Estimate Yes, Double Tax No: 8% Applied, But Returned Income Can’t Be Ignored- When Books Are Rejected, Declared Income Still Counts- ITAT Stops Double Addition in Estimated Profit Case
Kolkata ITAT ‘SMC’ Bench in Ashok Prasad Gupta Vs. ITO [ITA No. 1848/KOL/2025, AY 2017-18, order dated 31.12.2025] allowed Assessee’s appeal holding that while estimating income after rejection of books u/s 145(3), AO cannot ignore profit already declared in return. Assessee, engaged in country liquor business, had declared income of ₹3,97,510. AO rejected books on account of mismatch between bank credits and sales shown, and estimated income at 8% of total bank credits of ₹2,02,93,665, resulting in estimated income of ₹12,25,980 without giving credit for income already offered. CIT(A) partly granted relief but still sustained addition of ₹8,28,470. Tribunal condoned 200-day delay in filing appeal, accepted Assessee’s contention that declared income must be deducted from estimated profits, and directed AO to allow set-off of ₹3,97,510 from estimated income of ₹12,25,980. Accordingly, addition was reduced and appeal was allowed in favour of Assessee
FULL TEXT OF THE ORDER OF ITAT KOLKATA
