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Informative

85% of Unaccounted Cash Receipts as Income: ITAT Directs AO to Tax based on Net Profit

Update / Judgement Date

10 Feb 2025

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Appeal Against OrderIncome Tax

The ITAT directed the AO to tax 85% of unaccounted cash receipts as income, based on net profit. This decision provides guidance on how to treat unaccounted cash receipts in tax assessments. It emphasizes the importance of establishing a reasonable basis for determining taxable income in such cases. The ITAT's ruling aims to ensure that taxpayers are taxed fairly on their actual income, while also addressing concerns about unaccounted transactions.