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2023 (1) TMI 1211 - AT - Income TaxEstimation of income - Deposits in the bank accounts - undisclosed turnover - Addition made @ 8% of the undisclosed turnover by applying the provisions of Section 44AD - As argued prevailing margin ranges from 0.75% to 1% of the turnover - HELD THAT:- We note that the assessee is doing the business of jute bag trading. We have also examined the Annual Report for 2018-19 of M/S Ludlow Jute & Specialties Ltd wherein the net profit margin was only 0.42% in 31.03.2019 vis-à-vis 0.53% in 31.03.2018. We also note that in the current year, the assessee’s profit margin on sale was also around 1%. Therefore we deem it fit and reasonable to apply the rate of 1.25% on the undisclosed turnover of the assessee. We accordingly set aside the order of Ld. CIT(A) and direct the AO to apply the rate of 1.25% on undisclosed turnover instead of 8%. Accordingly the appeal of the assessee is partly allowed.
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