Functional comparability governs software-service benchmarking: dissimilar companies are excluded, while related-party filters, margins and working-ca...
The ITAT upheld the assessment of unaccounted income derived from land transactions involving the assessee acting as an agent for Sahara India Commercial Corporation Ltd., confirming a principal-agent relationship rather than principal-to-principal. The tribunal affirmed the estimation of profit at 20% on bogus bills based on seized documents and statements, directing the AO to recompute net profit accordingly. Additions under sections 40A(3) and 37(1) were disallowed as payments were made on Sahara's instructions via account payee cheques. Interest income accrued and identified from seized material was rightly taxed without telescoping. Notional interest on interest-free advances was deleted, as no diversion of borrowed funds was established. Additions for unexplained cash deposits and loose papers were deleted due to lack of corroborative evidence and acceptance of cash flow in regular books. The CIT(A)'s deletion of unsustainable additions was affirmed, and reassessment directed only on the profit estimation.
The ITAT upheld the assessment of unaccounted income derived from land transactions involving the assessee acting as an agent for Sahara India Commercial Corporation Ltd., confirming a principal-agent relationship rather than principal-to-principal. The tribunal affirmed the estimation of profit at 20% on bogus bills based on seized documents and statements, directing the AO to recompute net profit accordingly. Additions under sections 40A(3) and 37(1) were disallowed as payments were made on Sahara's instructions via account payee cheques. Interest income accrued and identified from seized material was rightly taxed without telescoping. Notional interest on interest-free advances was deleted, as no diversion of borrowed funds was established. Additions for unexplained cash deposits and loose papers were deleted due to lack of corroborative evidence and acceptance of cash flow in regular books. The CIT(A)'s deletion of unsustainable additions was affirmed, and reassessment directed only on the profit estimation.
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