Unexplained credits addition on adhoc basis at 5% cannot be sustained: Matter restored

Pradeep Kumar Agrawal Vs ITO (ITAT Raipur)

ITAT Raipur held that addition towards unexplained credits on estimated basis should be the average GP rate from the preceding 3 years. In the present case the same is taken as 5% without any basis. Accordingly, matter restored back to file of AO.

Facts- The assessee is engaged in trading business of paddy, rice, other bi-product and transport work. As the assessee was non-responsive, the case was completed u/s 147 r.w.s. 144 r.w.s. 144B of the I T Act on 26/03/2022, the final conclusion by the Ld. AO was that the c

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