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7.8 It is true that under presumptive taxation scheme, rate of income tax is taken at 8% of the total turnover. However, assessee's case do not fit into scheme of presumptive taxation as his turnover is well above the turnover limit for presumptive taxation. It is also generally observed in business that, as turnover increases generally margin goes on decreasing because businessmen play the game of high turnover and low margin business model. Assessee's business is related to daily needs and groceries, my observation in case of high turnover and lower margin fit into nature of business carried by appellant. In view of this, I hold that it will be a fair estimation of income of the assessee if net income of the assessee is taken 5% of the turnover of the assessee instead of 8% as estimated by AO. The appellant has taken a plea that his net income percentage shown in earlier year is far less in the range of 0.09% or in the range of 0.26%. However, it is Mohd. Sidiq Mushtaq Ahmde v. Addl. CIT not submitted by the assessee, that AY's of which net income percentage has been mentioned by assessee were scrutinized by AO earlier and net income percentage as claimed by the appellant is after such scrutiny by the department. In view of this, I direct the AO to adopt net profit percentage at 5% instead of 8% of total turnover. Accordingly, ground of appeal is PARTLY ALLOWED."

6. Per contra, the Ld. DR although supported the impugned order, however, he failed to rebut the contention of the counsel.

Mohd. Sidiq Mushtaq Ahmde v. Addl. CIT

7. We have heard the rival contentions, perused the material on record, impugned order, written submission and case law cited.

8. Heard rival contentions, perused the material on record, impugned order, written submission and case law cited before us. Admittedly, the AO passed assessment order ex parte qua the assesse. The Ld. AR argued that the worthy CIT(A) has not appreciated the facts of the case and arbitrary partly confirmed the addition by restricting the profit @ 5% as against 8% adopted by AO under presumptive taxation scheme, of the total turnover. In our view, though, the CIT(A) has observed that assessee's case do not fit into scheme of presumptive taxation as his turnover is well above the turnover limit for presumptive taxation, however, he has restricted profit @ 5% without analyzing the business book results viz~a~viz past history and comparable case to justify the applicability of the correct net profit rate in the case of the appellant assessee. Merely, observing that it is also generally observed in business that, as turnover increases generally margin goes on decreasing because businessmen play the game of high turnover and low margin business model is not enough. In fact, he ought to have substantiate with corroborative evidence, either any Mohd. Sidiq Mushtaq Ahmde v. Addl. CIT defect in the books of account or variation from the past history or comparable case.