2014 (7) TMI 1207

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....e following grounds of appeal: "1. In the facts and circumstances of the case and in law. the Ld. CIT(A) has erred in not upholding net profit @ 10% applied by the AO after sustaining the action of the AO regarding rejection of books of account u/s 145(3) of the Income Tax Act, 1961 for the reasons mentioned in the assessment order, in view of the numerous deficiencies pointed out by the AO in the accounts and significant specific disallowances under other sections were noted but not made in view of estimation of net profit rate. 2. In the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in applying the net profit of 6.5% instead of 10% adopted by the AO, without appreciating that the rate of net profit of 10% ....

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...., the Ld. C1T(A) has erred in following the case of M/s Harbhajan Singh & Co., Sangrur particularly when the Department has not accepted the said judgement and is already in appeal before the Hon'ble High Court. 6. It is prayed that the order of Ld. CIT(A) be set aside and that of the AO restored. 7. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard and finally disposed of." 3. The only issue raised in the present appeal is against the estimation of net profit rate in the case of the assessee after rejection of books of account under section 145(3) of the Act. 4. The brief facts relating to the issue are that during the course of assessment proceedings certain defects in the books of....

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....fore, no further addition had to be made in the case. 6. The Revenue is in appeal against the order of the CIT (Appeals) and pointed out that application of net profit rate of 6.5% was on the lower side. 7. The learned A.R. for the assessee pointed out that the rate applied by the CIT (Appeals) was on the basis of the earlier year's result and may be applied. 8. We have heard the rival contentions and perused the record. The Assessing Officer in the assessment order in para 3 had tabulated the defects in the books of account maintained by the assessee and in view of the exhaustive list, we are in conformity with the order of the CIT (Appeals) in rejecting the books of account under section 145(3) of the Act. Once the books of accou....