Bank Deposits Treated as Business Turnover – ITAT Reduces Profit Rate from 10% to 2%

ITO Vs MisarYar Khan (ITAT Lucknow) The ITAT Lucknow upheld the view that large bank deposits of ₹2.69 crore could not be taxed as unexplained income under Section 69A, and instead represented business turnover from the assessee’s Zari & Zardozi business. Accordingly, invocation of Section 69A read with Section 115BBE was rejected. While the CIT(A) had already granted relief by treating the deposits as turnover and estimating income at 10%, the Tribunal found this rate to be arbitrary and excessive. Relying on the assessee’s past accepted profit margins (around 1.65%-2.14%), the ITAT...