In case of rejection of books of account profit ratio applied for earlier year should be considered

Brief Facts of the Case During assessment the the books of accounts were not presented to the AO and therefore the AO rejected books of accounts u/s 145(3) of I.T. Act. And proceeded to apply the net profit rate at 8% which was excessive and arbitrary and does not have linkage with the net profit being shown in earlier years when the books of accounts were not rejected. Moreover in the appellant’s own case the A.O. has applied N.P. rate 5% which has been reduced by the CIT (Appeals) 4% in prior year’s assessment, on contract receipts. The A.O. did not advance any reason for adopting the...