The assessee failed to file its return despite substantial turnover and also failed to get its accounts audited under section 44AB. The Assessing Officer rejected the books of account under section 145(3) and disallowed 10 per cent. of the expenditure. The Tribunal held that while rejection of books was justified, estimation of income had to be fair and based on accepted past results. Considering that the assessee’s net profit rate accepted in the preceding year worked out to 1.52 per cent., the addition was restricted by directing the Assessing Officer to compute income at 1.52 per cent. of the turnover, after granting credit for the income already returned. (AY. 2011-12).