AO must give reason for rejecting books & estimating income by applying higher GP Ratio

Brief about the case The appellant was running liquor, wine and beer shop and was authorized to operate the liquor shop for the period of one year from April, 2007 to March 2008. The assessee purchased wine from different suppliers and the same is sold in cash. In the return of income, the assessee had shown income under the head “salary” only. During the year under consideration, the assessee was engaged in the business of wine, liquor and incurred a loss of Rs.1,07,746/-.This business loss was not claimed in the return. After examining the books of account of the assessee, the Assessing ...