https://www.taxtmi.com/caselaws?id=775688 The ITAT Visakhapatnam held that neither the AO nor the CIT(A) formally rejected the assessee's books of accounts before making ad hoc disallowances or estimating profit at 2%. The tribunal found no basis for the CIT(A)'s profit estimation, as it lacked support from comparable cases or the assessee's past records. Citing the Madras HC, the tribunal emphasized that formal rejection of books under Section 145(3) is mandatory before making such assessments. Arbitrary partial rejection of entries without justification is impermissible. Consequently, the matter was remanded to the CIT(A) for fresh consideration, allowing the assessee another opportunity to substantiate purchase claims. The grounds raised by the assessee were allowed for statistical purposes. en-us Fri, 25 Jul 2025 00:00:00 +0530 Tue, 29 Jul 2025 08:30:18 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=775688 The ITAT Visakhapatnam held that neither the AO nor the CIT(A) formally rejected the assessee's books of accounts before making ad hoc disallowances or estimating profit at 2%. The tribunal found no basis for the CIT(A)'s profit estimation, as it lacked support from comparable cases or the assessee's past records. Citing the Madras HC, the tribunal emphasized that formal rejection of books under Section 145(3) is mandatory before making such assessments. Arbitrary partial rejection of entries without justification is impermissible. Consequently, the matter was remanded to the CIT(A) for fresh consideration, allowing the assessee another opportunity to substantiate purchase claims. The grounds raised by the assessee were allowed for statistical purposes. Case-Laws Income Tax Fri, 25 Jul 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=775688