Hansa Dinesh Vs ITO (ITAT Bangalore Bench)
Bullion May Glitter, but It Does Not Yield 8% by Assumption: Profit Estimation on ₹30-Crore Turnover Set Aside u/ss 145(3) & 144B—Bangalore ITAT
Return Selected for Low Net Profit
The assessee was an individual engaged in wholesale & retail trading of gold bullion. She filed her return for AY 2023-24 declaring total income of ₹4,11,820.
The return was selected for scrutiny to verify the low net profit disclosed from the business. Complicating matters, the nature of business mentioned in the return was “financial intermediation,” whereas the assessee subsequently explained that her actual activity was bullion trading.
The AO issued notice u/s 143(2) on 19.06.2024 & repeatedly called upon the assessee to furnish business information, books of account, bank statements, stock particulars, purchase register, details of creditors & related records.
The assessee did not furnish adequate replies. A final show-cause notice dated 28.02.2025 was issued. Certain details were submitted on 06.03.2025, but the AO considered them incomplete & insufficient.
Books Rejected & ₹2.40-Crore Profit Estimated
The AO also issued notices u/s 133(6) to various parties, but only some of them responded. Due to incomplete compliance, absence of satisfactory supporting records & uncertainty regarding the assessee’s actual business activity, the AO rejected the books u/s 145(3).
