TaxTMI Login
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Just a moment...
AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether the estimation of the assessee's income by applying a 2% profit rate and disallowing books of account was valid where the assessee's transactions were in shares and commodity trades executed on recognised exchanges (NSEL) and the purchases and sales reflected real income.
Analysis: The issue required examination of the applicability of estimation under the statutory framework for assessment and whether the nature of online exchange transactions (commodity trades on NSEL) justified rejection of the books and estimation of income under Section 145(3) of the Income-tax Act, 1961. The Tribunal noted that enquiries under Section 133(6) were made, and that transactions were effected through recognised exchange platforms where physical delivery was not a necessary element. The Tribunal found that treating the assessee as a general trader in goods and applying a presumptive 2% profit rate was contrary to the nature of the assessee's exchange-based transactions and that the recorded purchases and sales reflected the real income from such transactions. The Tribunal therefore held that estimation and additions made by applying a standard profit rate were not warranted on these facts.
Conclusion: The estimation of income and the addition of Rs. 62,57,597 by applying a 2% profit rate are deleted and the appeal is allowed in favour of the assessee.
TaxTMI 
