Section 40A(3) not invocable as income assessed at flat gross profit rate: ITAT Chennai

Gold AIK Vs ITO (ITAT Chennai) ITAT Chennai held that since income of the assessee is assessed by applying flat gross profit rate of 2% hence provisions of section 40A(3) cannot be invoked. Accordingly, disallowance u/s. 40A(3) not justified. Facts- The assessee is a partnership firm engaged in the business of retail sale of gold in the name and style of M/s. Gold AIK. Post search operation, AO computed unaccounted sales of the assessee at Rs. 1,36,05,133/- and estimated the profit on unaccounted sale of jewellery at Rs.16,32,616/- and added to the returned income of the assessee. AO also unac...