Ad-hoc 20% Profit Estimate Set Aside; ITAT Restricts GP to 5% in Milk Trading Case

Hansraj Vs ITO (ITAT Delhi) The Delhi Bench of the ITAT, in the case of Hansraj, partly allowed the assessee’s appeal arising from a reassessment for AY 2014-15 involving large cash deposits treated as unexplained money under section 69A and taxed under section 115BBE. While the Tribunal upheld the validity of reassessment proceedings under sections 147/148, it found the ad-hoc estimation of income at 20% of gross receipts by the CIT(A) to be arbitrary and excessive. The assessee, engaged in small-scale milk trading, had declared gross receipts of about ₹1.94 crore, and contended that marg...