Tribunal Finds Business Profits at 2.21%, Rejects Unreliable Accounts and Prevents Double Taxation Under Section 143(3)

The ITAT rejected the assessee's books of accounts as unreliable and estimated business profits at 2.21% instead of the 0.47% originally returned. The Tribunal upheld the CIT(A)'s decision based on identical circumstances found in a sister concern's case. The Tribunal rejected the Revenue's argument for a higher profit rate and found the proposed comparable entity to be in a different business line. The Tribunal clarified that the estimated income should subsume previous disallowances to prevent double taxation, ensuring the total income computation matches the 2.21% of turnover estimation. Consequently, the Tribunal upheld the CIT(A)'s order, rejecting separate additions for unaccounted sales and unexplained expenditure as these were already incorporated in the profit estimation. .....

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