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12. We have carefully considered the rival submissions, orders of the authorities below and case laws cited at Bar. The first issue involves rejection of books of account by resorting to section 145 and estimation of figure of the turnover and net profits thereof. Pursuant to survey operation, the assessee has declared a profit of Rs.22,24,360/- as noted above. Thereafter, the return of income was filed wherein loss of Rs.14,77,294/- was declared from business activities which was sought to be set-off against the unreported profit declared during the time of survey and consequently a net profit of Rs.9,39,070/- only was offered for taxation purpose. We observe that the Assessing Officer has made detailed enquiries and pointed out specific discrepancies as recorded in the assessment order and also noted above in this order. We also notice that undeclared excess stock found at the time of survey has been accepted by the assessee. The difference in the balances in the books of account of the assessee vis-à-vis the supplier was also recorded by the Assessing Officer. The Assessing Officer returned his finding on several expenses which are not comparable with the sale declared by the assessee qua the earlier years. We find that the observations of the Assessing Officer on the comparison in expenses like octroi loading and unloading charges, etc. as noted above cast aspersions on the correctness of the books of account prepared by the assessee. Coupled with these facts, the incompleteness of books of account and non- production of books of account at the time of survey by the assessee has remained uncontroverted. In the light of these facts and circumstances, we find that the Assessing Officer was fully justified in rejecting the books of account and resorting to estimation of turnover and income thereon. We find that the Assessing Officer has estimated a net profit @ 1% on the estimated turnover on 1.5 crore which is in sync with the net profit declared in the past several years and is also just and fair having regard to retail nature of business as claimed. Therefore, we find force in the contention of the Assessing Officer that declaration of business loss during this year was only intended to set-off unexplained income detected at the time of survey. The CIT(A), in our view, has made incorrect observations that the overhead expenses as noted by the Assessing Officer are more or less fixed in nature and will not vary with the increase or decrease of the turnover and therefore gross profit rate inspite of net profit rate should have been applied. We are of the view that there is no rationale in the opinion of the CIT(A) that gross profit rate of the subsequent year should be taken as a basis instead of relying on net profit rates of the previous years in the facts and circumstances existing in the case. On the face of multiple defects in the quantum of expenses booked qua the turnover, variance in the account of the supplier, excess stock found at the time of search and consistent profit rates in the earlier years, absence of quantitative details at the time of survey, non-production of books of account at the time of survey, etc. hold adequately against the assessee. We, therefore, uphold the view taken by the Assessing Officer that 1% of the turnover is just and reasonable business profit of the assessee as against the business loss declared by the assessee. Accordingly, we set-aside the directions of the CIT(A) in this regard and uphold the order of the Assessing Officer. Accordingly, the Ground No.1 to 3 of the assessee's appeal are dismissed and Ground No.1 and 2 of the Revenue's appeal are allowed.