Estimated assessment bars separate addition for sundry creditors where business results are already covered.

Where books of account are rejected and income is assessed on an estimated basis, a separate addition for sundry creditors is not sustainable unless independently justified, because the estimation already captures the business results. The ITAT Agra deleted the addition on this ground and held the issue in favour of the assessee. The first ground was not pressed.

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Issues: Whether the addition made towards sundry creditors could be sustained after the books of account had already been rejected and income had been estimated.

Analysis: The assessee did not press the first ground. On the surviving issue, the books of account stood rejected and the income had been determined on an estimated basis. In such a situation, a separate addition of the sundry creditors was treated as impermissible, as the estimated assessment had already taken the business results into account.

Conclusion: The addition towards sundry creditors was deleted and the issue was decided in favour of the assessee.

Ratio Decidendi: Once books of account are rejected and income is assessed on estimation, a separate addition on the same trading account item is not sustainable unless independently justified.

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