ITAT Orders Income Estimation at 12.5% of Gross Receipts Instead of Disallowing Entire Entries as Bogus Due to Potential Expense Inflation

In a case concerning potential expense inflation, the ITAT ruled that income estimation at 12.5% of gross receipts was more appropriate than disallowing entire entries as bogus. The tribunal recognized that while some expenses may have been inflated, disallowing the entire amount was too harsh. This ruling demonstrates a balanced approach to dealing with suspected financial irregularities in tax assessments.