Ltd., College Road, Simdega, Jharkhand835223 थायी ले खा सं . /PAN No. : AADCM 7437 K (अपीलाथ /Appellant) .. ( यथ / Respondent) िनधा रती की ओर से /Assessee by : Shri Devesh Poddar, AR राज व क ओर से /Revenue by : Shri Pranob Kr. Koley, Sr.DR सुनवाई क तार ख / Date of Hearing : 13/08/2024 घोषणा क तार ख/Date of Pronouncement : 14/08/2024 आदे श / O R D E R Per Prabhash Shankar, AM : The captioned appeal has been filed at the instance of the assessee against order u/s 250 of the Income Tax Act,1961 (hereinafter 'the Act') dated 27.12.2022 passed by the ld. CIT(A), Patna3 for the assessment year 20152016, on the following grounds of appeal : 1. For that Id AO was not justified in estimating net profit @ 10% on the total turnover simply on the assumption that assessee is a government/ PSU contractor and in such government or PSU contracts there is provision of 10% profit. The estimate made is simply on AO own assumption without any basis and as such, the addition made for Rs. 54,70,260/ is fit to be deleted. 2. For that Ld AO was not justified in estimating the net profit without rejecting the audited books of the assessee. No estimate 2 ITA No.28/Ran/2023 of profit can be made by the AO without rejecting the books of the assessee. 3. For that there was no basis for the AO to have estimated net profit @ 10%. The assessee during the year had disclosed a Net Profit of 3.98% which was reasonable enough and compared well with previous and subsequent years records. Profit being estimated on assumption basis by the Ld AO without any parallel/ comparative source is highly unreasonable and uncalled for, and as such, the addition made thereby for Rs. 54,70,260/ is fit to be deleted. 4. For that the Ld AO was not justified in charging interest U/s 234 on the assessed income. Following the decision of Hon'ble Jharkhand High Court, interest U/s 234 A and B should be charged on the returned income and not on the assessed income. 5. For that other grounds in detail will be argued at the time of hearing. 2. Facts in brief are that the assessee is a company which derives income from civil construction work and filed its return of income on 31.03.2017 declaring total income at Rs.2,31,08,550/. The return was processed under Section 143(1) of the Act and the case was selected for limited scrutiny through CASS on the following issues : a) Large current liabilities in comparison to total asset in Balance Sheet; b) Large other expenses claimed in the Profit & Loss A/c. 3. Accordingly, the AO issued notice u/s.143(2) of the Act which was served upon the assessee, which remained noncomplied. Subsequent notices were issued to the assessee. However, the assessee neither made any proper compliance nor filed any explanation regarding his claim. As a result of continuous non 3 ITA No.28/Ran/2023 compliance on the part of the assessee, the AO also imposed penalty u/s.271(1)(b) of the Act. Thereafter, he issued a show cause notice to the assessee as to why not assessment be completed u/s.144 of the Act but the same was also not replied by the assessee. Accordingly, the AO completed the assessment u/s.144 of the Act estimating the net profit @10% of the total turnover of the assessee i.e. Rs 28,57,88,098/and after considering the disclosed income of Rs 2,31,08,550/added the difference of Rs 54,70,260/ to the total income of the assessee. 4. Before the ld.CIT(A) , the assessee filed as many nine grounds of appeal contesting the addition made by the AO. It was claimed that despite the audited books of account not being rejected, the AO applied net profit of 10% of profit on the disclosed turnover which was excessive. Before him, the assessee in support of the grounds submitted that the disclosed net profit for the year was 8.07% which is quite high in the trade. Even w.r.t. section 44AD provides for disclosing profit at the rate of 8% onl