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TMI Blog2018 (9) TMI 1623X X X X Extracts X X X X X X X X Extracts X X X X ..... iled declaring total income of Rs. 8,96,290/- and the scrutiny assessment was completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") at a total income of Rs. 95,44,420/- after assessing the net profit @10% of the gross receipts. Apart from this, the Assessing Officer also disallowed/added Rs. 60,87,105/- shown as advances from customers by treating the same as assessee's income from undisclosed sources. An addition of Rs. 1,15,000/- was also made for failure to deduct tax at source on payments made towards commission. The assessee's challenge to the assessment order before the Ld. CIT (A) was partly accepted with the Ld. CIT (A) directing the Assessing Officer to estimate the net profit @ 6.5% instead of 10% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same could not have been the basis for rejecting the books results. It was also submitted that a similar disallowance in assessment year 2010-11 was deleted by the Ld. CIT (A) and our attention was drawn to a copy of the first appellate authority order for assessment year 2010-11 in this regard. The Ld. AR vehemently argued that mere non-production of supporting bills did not give power to the Assessing Officer to reject the books results and other factors should also have been considered. The Ld. AR submitted that the rejection of book results should not be resorted to unless there were strong and sufficient reasons to indicate that the books of accounts were unreliable and incorrect which was not so in the case of the assessee. 4.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the assessment order that on the appointed date also, none attended nor were the books of accounts produced and, therefore, the Assessing Officer proceeded to reject the books of accounts u/s 145(3) of the Act and estimated the net profit @10% of gross receipts as against 3% as declared by the assessee. However, we note that while doing so, the Assessing Officer did not give any basis for estimating the net profit @10% by quoting any comparable cases in this regard. Similarly, during the course of appellate proceedings, the Ld. CIT (A) reached the conclusion that the Assessing Officer had erred in estimating net profit rate @10% of gross receipts since the assessee could produce certain percentage of bills, vouchers, etc. in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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