Estimated income addition cannot stand where regular books are maintained and declared lodge results are accepted.

Regular books of account were maintained for the lodge business, and the receipts and net income were duly shown in the accounts. In the absence of any valid reason to reject the declared results, income could not be enhanced on estimate. The declared net income was accepted as the proper figure, and the estimated addition sustained by the appellate authority was deleted in favour of the assessee.

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Issues: Whether the addition of Rs. 5,000 towards income from the lodge, sustained by the appellate authority on estimate, was justified when the assessee had maintained proper accounts for the relevant year.

Analysis: The assessee had maintained regular books of account for the lodge business and had shown the receipts and net income from that source. In the absence of any valid reason to reject the declared results, there was no justification for enhancing the income by estimate. The declared net income was accepted as the proper figure.

Conclusion: The addition of Rs. 5,000 was not justified and was deleted in favour of the assessee.

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