Salary and Commission Disallowance Deleted After Profit Estimate

Penchalaiah Dasari Vs ITO (ITAT Hyderabad) AO Can’t Blow Hot & Cold: Once Profit Is Estimated, No Further Disallowance: ITAT Hyderabad Deletes Salary & Commission Additions Hyderabad ITAT ‘B’ Bench, in Penchalaiah Dasari vs. ITO (ITA No.703/Hyd/2025, AY 2018-19, order dated 24.12.2025), partly allowed the assessee’s appeal and settled the well-established principle that the AO cannot make item-wise disallowances after rejecting books and estimating profits. The Assessee, a commission agent/direct selling agent, declared income of ₹15.90 lakh. The AO, noticing fall in net prof...