Sec. 145(3)of Income Tax Act, 1961 - Rejection of books of account - The assesse, a wholesale milk supplier, filed its return of income for the year under consideration declaring a total income of Rs. 4,91,830/- and return was processed u/s 143(1) of the I.T. Act. Thereafter the case was selected for scrutiny and notices u/s 143(2) and 142(1) were served upon the assessee. In response, the assessee attended and furnished the details as called from time to time. However, AO estimated the GP @ 15% of the assessee. CIT(A) reduced the estimation of GP @ 11% instead of 15% as per the same rate as disclosed by the assessee in its original return of income. ITAT partly allowed the appeal of the assessee holding that:- Assessee can be assessed to tax only on real income and not on any estimation or surmises. Therefore, we are of the view that assessee has declared 11.08% as GP without substantiating the result declared by it, the reasons best known to him. Considering the overall situation, in our considered view, assessee should be charged to tax @ 7% (considering the gross profit declared by the assessee in AY 2011-12 and 2012-13, where there is 6% increase in GP and we expect that assesse must have increased its GP by 10%.) Accordingly, we direct the AO to estimate the income @ 7%. VITHAL BABAN BANGAR vs. ITO. [2020] 79 ITR (TRIB) 055 (ITAT-MUMBAI)