The assessee was engaged in civil construction work. Its books of account were rejected under section 145(3) of the Income-tax Act, 1961 on the ground that during the entire assessment proceedings, no compliance was made on any date. The AO estimated the net profit rate of 12% on gross receipts. The Commissioner (Appeals) reduced this amount and estimated the net profit rate at 8% on the gross receipts. On cross appeals, the tribunal held that the AO while framing the assessment had lost sight of the fact that during the AY 2012-13, the turnover of the assessee had grown up by more than five times as compared to its preceding year. Assessee could not be expected to report the same rate of net profit as was earned in the preceding year. The audited accounts for the assessment year as well as for the past assessment years were available with the Department. It was not the case of the AO by drawing comparison with the past years audited accounts with the relevant year, the assessee had either shown certain expenses in abnormal terms or that certain expenses were debited for an abnormal amount. Since the turnover has gone up manifold in the year under consideration from reliance to the past years trading results was not to be an appropriate guide. Therefore, the AO was directed to apply the net profit rate of 6% on the gross receipts, without any further deduction. (AY. 2012-13)