The nature of business was same in the current year and books of accounts were accepted by the AO in preceding as well as subsequent assessment years and hence Tribunal was of the opinion that AO should have brought on record some concrete material to reject the books of accounts following the rule of consistency. The Tribunal observed that AO had rejected the books of accounts because it showed variation in gross profit margins. It was further observed that assesse had submitted all the bills and supporting evidence alongwith computation of raw materials which were recorded in books of accounts. The AO was not able to point out any specific instance of round tripping of material purchased from different parties. Hence Tribunal was convinced that AO had rejected the books of accounts without verifying the books of accounts and provide any just reasons for the same. Tribunal was of the belief that hypothetical calculations were made by AO on basis of entries in books of accounts for making additions against the assesse without any jurisdiction. The AO had also not pointed out whether assesse had violated any accounting standards prescribed for maintenance of books of accounts.In the end, the Tribunal concluded that CIT(A) was correct on appreciation of facts and materials on records and correctly did not agree with the findings of the AO and hence there was no justification of AO to reject the books of accounts under section 145(3) of the Act. Thereby the department appeal was dismissed. ( AY. 2008-09)