Topic

profit estimation

2 articlesLatest May 2026
Section 68 IT Act | Only Profit Element, Not Gross Turnover, Taxable as Unexplained Credit for Land Transactions : ITAT Ahmedabad
Case Law Analysis
|Income Tax Appellate Tribunal

Section 68 IT Act | Only Profit Element, Not Gross Turnover, Taxable as Unexplained Credit for Land Transactions : ITAT Ahmedabad

ITAT Ahmedabad rules that under Section 68 of the Income Tax Act, only the profit component (15% margin) of business receipts from land transactions can be taxed as unexplained credit, not the entire turnover. This sets a precedent for profit estimation in similar cases, shifting the burden of proof toward the revenue after the assessee establishes genuineness of transactions.

Section 44AD | Profit Estimation for Unaccounted Business Must Be Reasonable & Grounded in Audited Accounts, Not Arbitrary Presumptions : ITAT Ranchi
Case Law Analysis
|Income Tax Appellate Tribunal

Section 44AD | Profit Estimation for Unaccounted Business Must Be Reasonable & Grounded in Audited Accounts, Not Arbitrary Presumptions : ITAT Ranchi

ITAT Ranchi slashed the presumptive profit rate from 8% to 3% for an unaccounted electronic goods business, ruling that tax authorities cannot impose arbitrary additions without rejecting books or proving higher margins. The decision reinforces that presumptive taxation under Section 44AD must align with actual business performance, protecting small traders from speculative assessments.

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