Income estimation based on percentage of gross receipts - CIT(A) ...
Advertisement business thin margins dispute: ITAT guided by equity deems 8% of gross receipts as fair income estimation.
November 14, 2024
Case Laws Income Tax AT
Income estimation based on percentage of gross receipts - CIT(A) applied 12.5% net profit on gross receipts, assessee claimed thin margins in advertisement business. ITAT held some guesswork inevitable without financial data. CIT(A) lacked material for 12.5%, assessee failed to substantiate lower 1.5-2% claim. Section 44AD deems 8% of turnover as business income for eligible assessees based on empirical data. Guided by equity, ITAT considered 8% of gross receipts fair estimation, modifying CIT(A)'s 12.5% to 8%. Assessee's appeal partly allowed.
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