Profit margin disclosed by assessee cannot be rejected arbitrarily

Sukhwinder Singh Vs ACIT (ITAT Delhi) The issue under consideration is whether addition made by AO by application of N.P. rate of 8% is justified in law? ITAT states that, the profit margin of the assessee was very low and has never reached to the extent of 8% as is applied by the authorities below. The A.O. has not cited any comparable cases to arrive at the decision for application of N.P. rate of 8%, is justified in the matter. It is also not in dispute that in A.Y. 2001-02, the A.O. in the regular assessment under section 143(3) has accepted profit rate declared by assessee at 1.54%. The A...