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2019 (4) TMI 278 - AT - Income TaxMethod of accounting - Rejection of books of account - Mercantile system OR cash system of accounting - HELD THAT:- As noticed that the basis of rejections of the books of account and the method of accounting by the assessing officer was that the books of accounts of the assessee did not match with audited accounts and therefore, the genuineness of the expenditure could not be ascertained. The contention of the assessee is that the assessee has been following the same method and the assessing officer in other years had accepted the books results. There is no reason to adopt a different method and reject books of account, it is contention of the assessee that all the queries of AO were duly explained. This contention of the assessee is not acceptable under the facts of the present case. The AO in his order has pointed out specific defects which in our view are sufficient to reject of books of accounts. Therefore, no interference is called for in the finding of the Authorities below. - Decided against assessee Profit estimation - AO suggesting that the assessee is earning profit @8%- as submitted by assessee submitted that appellant is a Development Authority which work for execution of social welfare housing schemes of State Government, therefore earning profit cannot be applied that the a civil contractor - HELD THAT:- In the present case the assessing officer has mechanically applied @ 8% treating the assessee as a civil contractor without looking into fact that the assessee has also been carrying out social welfare schemes for EWS under aegis of the government of M.P. Therefore, the profit rate as applied by the assessing officer and confirmed by the Ld. CIT(A) cannot be sustained. Looking to the facts of the case and the fact that assessee is also carrying out Social Welfare Schemes. We restrict this profit @ 4%. - Decided partly in favour of assessee. Claim of set off brought forward losses of previous years - HELD THAT:- We find that before the ld. CIT(A) this ground was raised by the assessee, however no finding is given by the ld. CIT(A). Therefore, considering the facts, we deem it proper to restore ground No.2 & 6 to the file of the ld. CIT(A) for decision a afresh. Ld. CIT(A) is hereby directed to decide this issue in accordance with law.
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