https://www.taxtmi.com/caselaws?id=765856 ITAT Delhi allowed assessee's appeal against PCIT's revision order u/s 263. The case involved unaccounted cash purchases of Rs. 5,83,99,000 where AO estimated profit rate on cash transactions without invoking s. 40A(3) disallowance provisions. ITAT held that once AO estimates profit on cash purchases and taxes income accordingly, no further disallowance u/s 40A(3) is permissible. The tribunal cited Amman Steel Allied Industries and noted that when gross profit is estimated on purchases without allowing deductions, s. 40A(3) provisions cannot be invoked. Since AO took a plausible view supported by various HC decisions, PCIT's revision u/s 263 was inappropriate per Malabar Industrial precedent. en-us Fri, 07 Feb 2025 00:00:00 +0530 Tue, 11 Feb 2025 07:18:35 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=765856 ITAT Delhi allowed assessee's appeal against PCIT's revision order u/s 263. The case involved unaccounted cash purchases of Rs. 5,83,99,000 where AO estimated profit rate on cash transactions without invoking s. 40A(3) disallowance provisions. ITAT held that once AO estimates profit on cash purchases and taxes income accordingly, no further disallowance u/s 40A(3) is permissible. The tribunal cited Amman Steel Allied Industries and noted that when gross profit is estimated on purchases without allowing deductions, s. 40A(3) provisions cannot be invoked. Since AO took a plausible view supported by various HC decisions, PCIT's revision u/s 263 was inappropriate per Malabar Industrial precedent. Case-Laws Income Tax Fri, 07 Feb 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=765856