Tax authority's substitution of projected figures with actuals overturned; original acquisition valuation upheld; transfer pricing issues remitted for...
Beneficial owner held liable for differential customs duty; royalties added under Rule 10(1)(c); confiscation, penalties under s.111(m), s.114A, s.112...
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.
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.
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