Rajendra Prasad Salla, Nirmal vs Income Tax Officer, Ward-1,, Nirmal on 8 February, 2018
the fact that books of account are to be rejected and the
income is to be estimated. AO estimated the income @ 5%
relying on various Co-ordinate Bench decisions, which was
confirmed by the CIT(A). However, perusing the various orders
indicate that a uniform net profit cannot be adopted in each
and every case of similar business. The estimation of net profit
may be on the basis of the facts involved in each and every
case. In all the orders relied upon before us, estimation of
income is varying from 2.5% to 5%. The latest order by the
SMC Bench in the group case of Badri Srinivas Vs. ITO (supra)
is @ 3%. In the said case, the Bench has considered the issue
as under: