Appeal dismissed for 2015-16, partially allowed for 2017-18. Importance of record-keeping and fair assessment.

The Tribunal dismissed the appeal for A.Y. 2015-16 and partially allowed the appeal for A.Y. 2017-18, emphasizing the importance of proper record-keeping and a fair assessment process. The appellant contested the arbitrary profit rate imposed by the Assessing Officer and raised concerns about inadequate opportunities due to non-service of notices. The Tribunal upheld the CIT(A)'s determination of net profit and treatment of interest income separately, partially granting relief to the appellant for certain grounds in A.Y. 2017-18.

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Issues:
1. Assessment made under section 144 of the Income Tax Act based on arbitrary profit rate.
2. Non-service of notices under section 143(2) as prescribed.
3. Inadequate opportunity provided to the appellant.
4. Reliance on assumptions and presumptions without proper scrutiny of evidence.
5. Disallowance of salary and interest paid to partners.
6. Treatment of interest income separately as income from other sources.
7. Determination of net profit percentage by the CIT(A).
8. Rejection of books of account under section 145(3) of the Act.
9. Appeal challenging the orders of the CIT(A) for A.Ys. 2015-16 and 2017-18.

Analysis:
1. The appeals were against the orders of the Commissioner of Income Tax (Appeals) and the Assistant Commissioner of Income Tax for A.Ys. 2015-16 and 2017-18, based on assessments under section 144 of the Income Tax Act. The appellant contested the arbitrary profit rate of 6% imposed by the Assessing Officer, contrary to the 2.07% rate declared by the appellant based on audited financial statements.

2. The appellant raised concerns regarding the non-service of notices under section 143(2) as prescribed, leading to inadequate opportunity for the appellant to present their case. The appellant argued that the assessment order was illegal due to insufficient opportunity provided and the non-service of the draft assessment order before its passing.

3. The appellant challenged the reliance on assumptions and presumptions by the authorities without proper scrutiny of the appellant's submissions and evidence. The appellant sought a re-examination of the case based on the proper maintenance of books of accounts and audited records.

4. The CIT(A) upheld the assessment orders, determining the net profit at 4% for A.Y. 2015-16 and including interest and salary paid to partners for A.Y. 2017-18. The treatment of interest income separately as income from other sources was also contested by the appellant.

5. The appellant's arguments centered on the nexus between interest earned and interest paid in relation to the business activities. The appellant maintained that the interest paid should be adjusted with interest received and not separately assessable. The Tribunal partially allowed the appeal for A.Y. 2017-18 while dismissing certain grounds for A.Y. 2015-16.

6. The Tribunal found no infirmity in the CIT(A)'s orders, dismissing the appeal for A.Y. 2015-16 and partly allowing the appeal for A.Y. 2017-18. The judgment emphasized the importance of proper maintenance of records and the necessity for a fair and just assessment process.

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