2021 (7) TMI 796

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....n the basis of closed books of accounts should have been accepted in the interest of justice. 2. That in any view of the matter net profit rate of 7% as applied by Assessing Officer by applying the provision of Section 143(3) of the Income Tax Act is highly unjustified, especially when books are properly maintained and verified hence the addition made by rejecting the books of accounts this count is unwarranted. 3. That in any view of the matter a net profit rate of 7% as applied by the Assessing Officer on declared receipt is highly unjustified and illegal in the facts and circumstances of the case and therefore the extra addition so made amounting to Rs. 3,68,770/- on this account is unwarranted and liable to be declared. 4. That in....

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..... 7.25 crores is not accepted by Assessing Officer. Thus, the Ld. AR has submitted that after rejection of books of account if the net profit declared by assessee is better than the past history then no addition is justified. In support of his contention, he has relied upon the decision of this Tribunal dated 11.10.2010 in the case of ACIT Vs. Hemant Kumar Sindhi as well as in the case of M/s. Baba Builders in ITA. Nos. 234 & 274/Alld/2010. These decisions have been upheld by jurisdiction High Court. Thus he has submitted that in view of the binding precedence the addition made by Assessing Officer is not justified the same may be deleted. 5. On the other hand, the Ld. DR has submitted that the net profit declared by assessee for the A.Y. ....

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....nce of various cases where the income estimated declared by taking net profit rate 4.5% to 12% as well as well as the provision of Section 44AD and then taken the net profit at 7%. It is pertinent to note that after rejection of books of account u/s. 145(3) of the I.T. Act, 1961 it is incumbent upon the Assessing Officer to pass the best judgment assessment. While estimating the income of the assessee there should be a proper and reasonable basis and guidelines. It is settled proposition of law that past history of the assessee is a proper and reasonable guidelines for estimation of income after rejection of books of account. The comparative details for the A.Y. 2011-12 and for the year under consideration are not in dispute. The assessee h....