HC ruled that AO cannot invoke Section 145(3) of IT Act without...

HC ruled that AO cannot invoke Section 145(3) of IT Act without expressly identifying infirmities or discrepancies in assessee's books of accounts. The court held that AO's determination of 10% net profit rate was based on pure guesswork without proper material or evidence, making it impermissible under established legal principles. The court clarified that res judicata doctrine does not apply to income tax assessment proceedings, as each year's assessment is independent and final only for that specific year. Revenue authorities cannot make assessments through conjecture without reference to supporting evidence or material. The concurrent findings of CIT (Appeals) and ITAT interfering with AO's order were upheld as legally sound, with substantial question of law decided in favour of assessee against Revenue.