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TMI Blog2010 (8) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... or scrutiny assessment. During the assessment proceedings, after hearing the assessee and considering the record made available, the Assessing Officer ['the AO'] rejected the books of account and, invoking Section 145(3) of the Act, proceeded to make estimate of the net profit taxable in the hands of the assessee while applying the net profit rate of 8.17% based on the assessment completed in the case of the assessee for the immediate preceding year. Aggrieved by the aforesaid order dated 28.11.2008, the assessee preferred an appeal that was considered and partly allowed by the Commissioner of Income Tax (Appeals), Bikaner ['the CIT (A)'] by the order dated 09.02.2009. The learned CIT (A) did not approve of reduction of sublet premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at 188 ITR 44 and S.N. Namisiyam Chettiar, 38 ITR 579 thereby came to the conclusion that the assessing officer is well justified in invoking the provisions of Section 145(3) of IT Act. The Ld. CIT (A) further found that in view of entire facts and circumstances of the case, addition made by the assessing officer at Rs. 39,82,680 cannot be sustained and accordingly deleted the same. He also found that the reduction of sub let premium at 3.5% on gross contract receipts which comes to Rs. 22,88,414 was rightly claimed by the assessee but the assessing officer has reduced it out of gross contract receipts to arrive at the income assessed by applying NP rate. Therefore, he found that the income or the gross contract receipts after reduction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approach of the AO when the AO proceeded to reduce the sublet premium out of the gross contract receipts and found it justified that the same was claimed in the Profit & Loss account. The learned CIT (A) further upheld the computation and calculation of net book profit @ 5.55% on the basis of the record and observed that the same was in accordance with the guidelines of CBDT. Leaving aside the question of guidelines, the finding that the basis of rate of profit exists on record can only be said to be that related to the questions of fact and a matter of appreciation of evidence. So far the learned AO adopting 8.17% profit rate on the basis of previous year assessment is concerned, it is noticed from the facts stated in CIT (A)'s ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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