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2017 (2) TMI 1360 - AT - Income TaxN.P. estimation - rejection of books of accounts - Held that:- Assessing Officer has himself agreed in his latter remand report that assessee’s books are indeed fabricated. This made the CIT(A) to reject the same and adopt net profit @ 3% hereinabove. We come to Section 251 at this stage to notice that the same contains an explanation as well to all clauses thereof that a CIT(A) may also consider and decide any matter in which the order appealed against was passed notwithstanding that such matter was not raised by the concerned appellant - Assessee’s case in the facts narrated hereinabove is much stronger since he has indeed raised the issue of rejection of books during the course of the lower appellate proceedings. Revenue further fails to prove any genuineness element in assessee’s books of account by leading cogent supportive material. We thus find no reason to interfere with CIT(A)’s order rejecting assessee’s books of account thereby estimating his net profit @ 3%. Section 40A(3) disallowance - Held that:- We deem it appropriate at this stage to quote hon’ble jurisdictional high court’s judgment in CIT vs. Dhiraj R. Rungta [2014 (4) TMI 711 - GUJARAT HIGH COURT] holding that in a case where an assessee’s books of accounts are rejected being defective, the very books could not be relied upon to make disallowances/additions. Estimating much higher net profits @ 3% as against 1.5% already declared - Held that:- We find that the same involve ‘raddiwala suppliers’ instead of waste paper suppliers to paper mills as is the instance involved in assessee’s case. It has further come on record that the assessee has even fabricated his books of account whereas he had duly maintained the same in earlier assessment years. We accordingly observe that the CIT(A) has rightly estimating assessee’s net profit @ 3% in the given facts of this batch of six appeals. The assessee’s identical sole substantive ground in all the impugned assessment years is rejected.
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