TaxTMI 
TaxTMI 
2014 (12) TMI 1266
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....nt of the assessee after taking into consideration the report of the auditor's obtained u/s 142(2A) of the Income Tax Act and after giving valid reasons for doing so. 2. The CIT(A) has erred in law and facts of the case in failing to appreciate that the net profit rate applied of 2.5% cannot be considered to be either excessive or unreasonable. He has failed to take into account the following decisions in which higher net profit rate have been confirmed: a) Rajesh Kumar Singh vs. I.T.O., Ward 1(3), Gorakhpur 5 MTC 289, I.T.A.T. Allahabad b) Dy. CIT Circle Bulandshahar vs. Allied Construction 105 ITD 1(SB), I.T.A.T. Delhi c) Sri Arvind Kumar Chaudhary vs. Dy CIT Gonda I.T.A. No.172/Lkw/10" 3. Learned D. R. of the Revenue supported th....
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....ome marginal difference, if any, goes to increase or decrease the revenue of the next year, I am not in a position to quantify the deviation to the revenue and balance sheet. The deviation and its impact to the revenue and the balance sheet cannot be therefore exactly ascertained." 5. From the above, it can be seen that it is noted by special auditor that the assessee has denied to have carried out physical verification of WIP as on 31/03/2004 and hence, it can be reliably confirmed that the WIP is an approximation. It is also observed by the special auditor that they are not in a position to quantify the deviation to the revenue and balance sheet. In our considered opinion, correct figure of closing stock is very important for determining....
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....d." 5.1 From the above Para from the order of CIT(A), it is seen that he has decided the issue by giving much stress on this that the assessee was working under abnormal working condition. It may be true but then how it helps the assessee for not rejecting the book result because when the assessee could not maintain proper books of account by physically verifying the closing stock etc., such book results are not reliable and the only option left is to reject the book result and estimate the profit. It may be that the reasons for which the assessee could not maintain proper books is that the assessee was working under abnormal business conditions but then also, such improper books cannot be relied upon to assess the income of the assessee a....