ITAT held that the rejection of books and estimation of business...

ITAT held that the rejection of books and estimation of business income at 25% or 8% of undisclosed advertisement contract receipts was arbitrary and unsupported by comparable cases, industry data, or specific defects in accounts. Considering the assessee's past average profit margin of 3.5%, the thin-margin nature of advertisement agency business, and absence of contrary material, the Tribunal directed estimation of income at 5% of the relevant contract receipts. ITAT further accepted that cash deposits represented business receipts already embedded in the profit estimation; a separate addition would result in impermissible double taxation. Consequently, the assessment was modified and the assessee's appeal was partly allowed.