INCOME TAX ACT, 1961

Section 145(3)

Accounting method - Rejection - Estimation of profit ignoring past history of assessee -

AO rejected assessee's books and made addition by estimating net profit @ 8% by invoking section 44AD, however, ignoring past history of assessee.Held: Past history of assessee had attained finality or was not in dispute same had to be preferred over profit of comparable cases. In the instant case assessee was in the same business and doing same contract work for various corporate houses rather big and reputed corporate houses. Therefore, assessee's contract work was not only audited by auditors but it was also certified by other companies including some future companies before making payment to assessee. When facts pertaining to assessment year under consideration were not different from preceding years as far as business activiteis of assessee were concerned, then assessee's own past history was the proper basis for estimation of income for the year under consideration. As apparent, net profit declared by assessee for the year under consideration was in line with past history of assessee therefore, even after rejection of books of account no trading addition was warranted.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10

INCOME TAX ACT, 1961

Section 14

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