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2010 (6) TMI 781 - HC - Income TaxRejection of books of accounts - Estimation of income - determining the net profit rate and turnover - method adopted by the AO for determining the net profit rate during the assessment year - Tribunal has restricted the net profit rate at 3 per cent - Being aggrieved, the Department has filed the present appeals. HELD THAT:- In the instant case, various discrepancies were found by the AO as has already been pointed out by the learned counsel of the appellant. In such a situation, the AO has no option except to reject the books of accounts and estimate the income as the accounts were found defective and s. 145(2) of the IT Act is applicable as per the ratio laid down in the case of CIT vs. Thakurmal Bajranglal [1987 (7) TMI 21 - RAJASTHAN HIGH COURT] as well as Ramjiwan Lal [1979 (10) TMI 55 - ALLAHABAD HIGH COURT] Therefore, we uphold the rejection of the books of accounts by the AO for the assessment years under consideration. Additions to the total income shown by the assessee are not necessary concomitant to an order passed under s. 145 or 143(2) of the Act. In the instant case, by looking at the history, it appears that the net profit rate was in the range of 1.88 per cent to 3 per cent, which was accepted by the AO himself or by the Tribunal which is a final fact -finding authority as observed in the case of Kamala Ganapathy Subramaniam [2001 (2) TMI 132 - SUPREME COURT] Estimation is a question of fact - See New Plaza Restaurant [2008 (7) TMI 260 - HIMACHAL PRADESH HIGH COURT] and Sanjay Oilcake Industries [2008 (3) TMI 323 - GUJARAT HIGH COURT] As during the assessment years under consideration, no different yardstick can be adopted and no interference is required as per the ratio laid down in the case of Zora Singh [2007 (2) TMI 153 - PUNJAB AND HARYANA HIGH COURT] - No question of law arises because the method adopted by the AO for determining the net profit rate during the assessment year which is similar as in the other assessment years as per the ratio laid down in the case of Textile Agents [1990 (7) TMI 66 - ALLAHABAD HIGH COURT] - The accounts were rejected and net profit rate was estimated which ultimately leads to the factual aspects of the case and normally no substantial question of law arises as per the ratio laid down in the case of Hargopal Singh [2004 (8) TMI 35 - PUNJAB AND HARYANA HIGH COURT] We decline to interfere with the impugned orders passed by the Tribunal which are hereby sustained along with the reasons mentioned therein.
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