Profit estimation on unaccounted turnover: AO estimated 8% profit based on seized material, which was...

Profit estimation on unaccounted turnover: AO estimated 8% profit based on seized material, which was reduced to 5% by CIT(A). ITAT held that in case of profit estimation u/s 145, Revenue must make an honest and fair estimate by applying the profit rate declared in preceding years. Considering the assessee's business of trading in Kirana items, ITAT opined that 4% profit amounting to Rs. 35,70,673 shall meet justice. Since Rs. 75 lakh was offered for taxation as business income, the additional profit needs to be telescoped with the offered income, and no separate addition is required. Unexplained expenditure: Assessee argued that once books were rejected and profits estimated on turnover, expenses for earning such profits should be consider..... .....

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