ITAT modified profit margins for undisclosed income in ...

Profit Margins Revised: 40% for Hotel Business and 13% for Real Estate Under Section 68 Tax Assessment

February 14, 2025

Case Laws Income Tax AT

ITAT modified profit margins for undisclosed income in hotel/restaurant and real estate businesses following search and seizure action. For hotel/restaurant operations, tribunal reduced profit margin from 50% to 40% based on historical book profits ranging from 31-47%. For real estate transactions, margin lowered from 17% to 13% considering actual profit ratios. Regarding unsecured loans under Section 68, ITAT reversed CIT(A)'s deletion and upheld AO's additions, citing absence of incriminating materials during search and applying Abhisar Buildwell precedent. Court emphasized that seized materials must be considered in totality, rejecting selective interpretation, and maintained that only real income can be taxed following Godhra Electricity principles.

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ITAT modified profit margins for undisclosed income in ...

Profit Margins Revised: 40% for Hotel Business and 13% for Real Estate Under Section 68 Tax Assessment

February 14, 2025

Case Laws Income Tax AT

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