Estimated rate of Gross Profit should be arrived at taking into due consideration the specific circumstances prevailing in the Assessee’s case: ITAT
Income Tax Appellate Tribunal ( ITAT) Chennai Bench in the case of *GOLD AIK vs ITO* has held that estimated rate of Gross Profit should be arrived at taking into due consideration the specific circumstances prevailing in the Assessee’s case. The case covers several key issues faced by Tax Payers in general and business entities engaged in JEWELLERY business in particular. Some of the practical issues dealt with decisively by the aforementioned order are as follows:
1) Estimated rate of Gross Profit should be arrived at taking into due consideration the specific circumstances prevailing in the Assessee’s case. Gross profit estimation was reduced from 14.04% to 2%
2) Where a Profit Rate/Presumptive taxation is done, no further disallowance can be made for cash payments or cash transactions u/s 40A(3). ITAT agreed and quashed the entire additions made for cash payments.
The judgement would benefit the persons engaged in Jewellery business at various levels and also to the taxpayers wherein estimation is done by the AO during assessment proceeding.
The Copy Of the Appellate is as under:
